Question
Assume that Shavonne's marginal tax rate is 50% and her tax rate on dividends is 20%. If a corporate bond pays 6.4% interest, what dividend
Assume that Shavonne's marginal tax rate is 50% and her tax rate on dividends is 20%. If a corporate bond pays 6.4% interest, what dividend yield would a dividend-paying stock (with no growth potential) have to offer for Shavonne to be indifferent between the two investments from a cash-flow perspective?
Multiple Choice
- 4.00%
- 5.00%
- 6.40%
- 20.00%
- None of the choices are correct.
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Advanced Cost Accounting
Authors: J.K. Mitra
1st Edition
8122425941, 978-8122425949
