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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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