Assume That Shavonne's Marginal Tax Rate Is 50% and Her

Multiple Choice

Assume that Shavonne's marginal tax rate is 50% and her tax rate on dividends is 15%. If a corporate bond pays 10.20% 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?

A) 6.00%.
B) 7.00%.
C) 10.20%.
D) 15.00%.
E) None of the choices are correct.