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Question 1 Assume that ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is currently selling for $100

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Question 1 Assume that ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is currently selling for $100 per share with a $400 annual dividend ABC Inc anticipates a one-year holding period and expects to sell the stock at $100. The corporation is at 25% average tax rate and the annual interest rate is 8% Calculate the after-tax rate of return

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