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?
A) 6%
B) 7%
C) 10.2%
D) 15%
E) None of these
Correct Answer:
Verified
Correct Answer:
Verified
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