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Mantle Corporation is considering two equally risky investments: A $5,000 investment in preferred stock that yields 6.5%. A $5,000 investment in a corporate bond that
Mantle Corporation is considering two equally risky investments: A $5,000 investment in preferred stock that yields 6.5%. A $5,000 investment in a corporate bond that yields 10%. What is the breakeven corporate tax rate that makes the company indifferent between the two investments? Assume a 70% dividend exclusion for Tax on Dividends
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