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Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is...

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Accounting

Assume that Keisha's marginal tax rate is 40% and her tax rate on dividends is 25%. If a city of Atlanta bond pays 6.9% interest, what dividend yield would a dividend-paying stock (with no growth potential) have to offer for Keisha to be indifferent between the two investments from a cash-flow perspective?

Multiple Choice

25.00%

10.20%

9.20%

6.90%

None of the choices are correct.

Answer & Explanation Solved by verified expert
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