Buggy whip manufacturing company is issuing preferred stock


Question: Buggy Whip Manufacturing Company is issuing preferred stock yielding 14%. Selten Corporation is considering buying the stock. Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 44%. What is the after-tax preferred yield for Selten? (Round your answer to 2 decimal places.)

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Finance Basics: Buggy whip manufacturing company is issuing preferred stock
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