A US corporation A buys a share of preferred stock of another US firm B (non-affiliated) at $40 and sells it at year-end at $40. The firm A receives a $4 year-end dividend. The firm A is in the 21% tax bracket. What is their after-tax return for this investment during this period? Answer in percentage. Group of answer choices 0.63% 3.00% 5.00% 8.95% 9.37%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A US corporation A buys a share of preferred stock of another US firm B (non-affiliated) at $40 and sells it at year-end at $40. The firm A receives a $4 year-end dividend. The firm A is in the 21% tax bracket. What is their after-tax return for this investment during this period? Answer in percentage.

Group of answer choices
0.63%
3.00%
5.00%
8.95%
9.37%
 
 
 
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