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 10.2% 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%.
B) 7%.
C) 10.2%.
D) 15%.
E) None of these.