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Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable state of Florida muni bonds (which yield 4% but are not taxable). The fede the after-tax rates of return on all three securities after paying federal corp After-tax rate of return on AT&T bond: %

Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable state of Florida muni bonds (which yield 4% but are not taxable). The fede the after-tax rates of return on all three securities after paying federal corp After-tax rate of return on AT&T bond: %

Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
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Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds (which yield 5.9%), AT&T preferred stock (with a dividend yield of 5.0%), and state of Florida muni bonds (which yield 4% but are not taxable). The federal tax rate is 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt. Find the after-tax rates of return on all three securities after paying federal corporate taxes. Round your answers to three decimal places. After-tax rate of return on AT&T bond: % After-tax rate of return on AT&T preferred stock: After-tax rate of return on Florida muni bonds: %
Transcribed Image Text:Corporate After-Tax Yield The Shrieves Corporation has $15,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds (which yield 5.9%), AT&T preferred stock (with a dividend yield of 5.0%), and state of Florida muni bonds (which yield 4% but are not taxable). The federal tax rate is 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt. Find the after-tax rates of return on all three securities after paying federal corporate taxes. Round your answers to three decimal places. After-tax rate of return on AT&T bond: % After-tax rate of return on AT&T preferred stock: After-tax rate of return on Florida muni bonds: %
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