Assume that Shavonne's marginal tax rate is 37 percent and her tax rate on dividends is 25 perce If a corporate bond pays 9.8 percent interest, wh dividend yield would a dividend-paying stock (w no growth potential) have to offer for Shavonne

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume that Shavonne's marginal tax rate is 37
percent and her tax rate on dividends is 25 percent.
If a corporate bond pays 9.8 percent interest, what
dividend yield would a dividend-paying stock (with
no growth potential) have to offer for Shavonne to
be indifferent between the two investments from a
cash-flow perspective
Transcribed Image Text:Assume that Shavonne's marginal tax rate is 37 percent and her tax rate on dividends is 25 percent. If a corporate bond pays 9.8 percent interest, what dividend yield would a dividend-paying stock (with no growth potential) have to offer for Shavonne to be indifferent between the two investments from a cash-flow perspective
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