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Subject Tax Accounting Maurice is currently considering investing in a high dividend yield stock with no growth potential that pays a 6% dividend yield or

Subject Tax Accounting

Maurice is currently considering investing in a high dividend yield stock with no growth potential that pays a 6% dividend yield or bonds issued by The Coca Cola company that pay 8%.If Maurice's ordinary tax rate is 25% and his dividend tax rate is 15%, which investment should he choose? Which investment should he choose if his ordinary tax rate is 30%. At what ordinary tax rate wouls he be indifferent to the stock or to the bond? What strategy is this decision based upon?

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