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Buggy Whip Manufacturing Company is issuing preferred stock yielding 12%. Selten Corporation is considering buying the stock. Assume that Buggy's tax rate is 0% due

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Buggy Whip Manufacturing Company is issuing preferred stock yielding 12%. Selten Corporation is considering buying the stock. Assume that Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 30% What is the after-tax preferred yield for Selten? Assume the tax rate on dividends is 15% (Round your answer to 2 decimal places.) Multiple Choice

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