Question
Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is 25%. If a city of Atlanta bond pays 7.5% interest,
Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is 25%. If a city of Atlanta bond pays 7.5% interest, what dividend yield would a dividend-paying stock (with no growth potential) have to offer for Keisha to be indifferent between the two investments from a cash-flow perspective?
Multiple Choice
- 25.00%
- 11.00%
- 10.00%
- 7.50%
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Advanced Cost Accounting
Authors: J.K. Mitra
1st Edition
8122425941, 978-8122425949
