Question
Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is 20%. If a city of Atlanta bond pays 9.12% interest,
Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is 20%. If a city of Atlanta bond pays 9.12% 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?
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Financial Accounting International Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
6th Edition
978-0470623275
