Assume that Will's marginal tax rate is 20% and his tax rate on dividends is 15%. If a dividend-paying stock (with no growth potential) pays a dividend yield of 8.6%, what interest rate must the corporate bond offer for Will to be indifferent between the two investments from a cash-flow perspective?

Multiple Choice

11.33%

10.52%

9.14%

6.57%

None of the choices are correct.