Your corporation has a marginal tax rate of 35% and has purchased preferred stock in another company.The before-tax dividend yield on the preferred stock is 8.75%.What is the company's after-tax return on the preferred,assuming a 70% dividend exclusion? (Round your final answer to two decimal places. )

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Quizplus · Accepted Answer

11ea856c_8bff_ca42_9aec_b7b1a4f4f5ad_TB1222_00 After-tax dividend yield = Preferred dividend rate [1 - (1 - Div exclusion%)(T)]
After-tax dividend yield = 7.83%

Your Corporation Has a Marginal Tax Rate of 35% and Has