After-tax rates of return on three securities


The Shrieves Corporation has $5,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 8.75%, state of Florida muni bonds, which yield 6% (but are not taxable), and AT&T preferred stock, with a dividend yield of 7.25%. Shrieves's corporate tax rate is 35%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities. Round your answers to two decimal places.

A-T rate of return on AT&T bond %

A-T rate of return on Florida muni bonds %

A-T rate of return on AT&T preferred stock %

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Finance Basics: After-tax rates of return on three securities
Reference No:- TGS042106

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