A corporation recently purchased some preferred stock that has a before-tax yield of 7 percent. The company has a tax rate of 40 percent. What is the after-tax yield on the preferred stock?
A) 4.20%
B) 5.04%
C) 5.65%
D) 6.16%
E) 7.00%

Question

Quizplus · Accepted Answer

The Answer of A corporation recently purchased some preferred stock that has a before-tax yield of 7 percent. The company has a tax rate of 40 percent. What is the after-tax yield on the preferred stock?
A) 4.20%
B) 5.04%
C) 5.65%
D) 6.16%
E) 7.00%

A Corporation Recently Purchased Some Preferred Stock That Has a Before-Tax