Question
The Shrieves Corporation has $5,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 9.25%, state of Florida
The Shrieves Corporation has $5,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 9.25%, state of Florida muni bonds, which yield 5.5% (but are not taxable), and AT&T preferred stock, with a dividend yield of 7.75%. Shrieves's corporate tax rate is 35%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities. Round your answers to two decimal places. After-tax rate of return on AT&T bond % After-tax rate of return on Florida muni bonds % After-tax rate of return on AT&T preferred stock %
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