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Company ABC pays corporate tax at the 35% rate. Company ABC can buy a bond in firm XYZ yielding 12 % annual interest or a

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Company ABC pays corporate tax at the 35% rate. Company ABC can buy a bond in firm XYZ yielding 12 % annual interest or a preferred stock in firm XYZ yielding a 9% annual dividend payment. Which choice will provide a higher after-tax return to Company ABC1

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