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Mutiple Choice
Seve&Exit
TB MC Qu. 03-82 (Algo) Assume that Will's marginal tax rate is....
Assume that Will's marginal tax rate is 25 percent and his tax rate on dividends is 15 percent. If a dividend paying stock (with no growth potential) pays a dividend yield of 8.8 percent, what interest rate must the
corporate bond offer for Will to be indifferent between the two investments from a cash-flow perspective?