Assume That Will's Marginal Tax Rate Is 20 Percent and His

Assume that Will's marginal tax rate is 20 percent and his tax rate on dividends is 15 percent. If a dividend-paying stock (with no growth potential) pays a dividend yield of 8.6 percent, what interest rate must the corporate bond offer for Will to be indifferent between the two investments from a cash-flow perspective?

A) 11.33 percent
B) 10.52 percent
C) 9) 14 percent
D) 6) 57 percent
E) None of the choices are correct.