Calculation of after tax return
Course:- Finance Basics
Reference No.:- EM1359102

Assignment Help >> Finance Basics

The Omega Corporation has some excess cash that it would like to invest in marketable securities for a long-term hold. Its vice-president of finance is considering three investments (Omega Corporation is in a 35 percent tax bracket and the tax rate on dividends is 15 percent). Which one should she select based on aftertax return: (a) Treasury bonds at a 9 percent yield; (b) corporate bonds at a 12 percent yield; or (c) preferred stock at a 10 percent yield?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Identify two articles in the University Library: one in which the business problem is researched using a descriptive statistical method and another using an inferential meth
Describe the accounting treatment (as required by the Codification) that appears to be more appropriate given the circumstances. State any assumptions that you make in reachin
The General Store has a cost of equity of 15.8 percent, a pre-tax cost of debt of 7.7 percent, and a tax rate of 32 percent. What is the firm's weighted average cost of capi
increased from 25% to 30%, while your state marginal bracket remained 4.5%? • A corporate bond with a 5.1% after-tax return • An out-of-state municipal bond with a 5.0% after-
What changes have occurred in the human service sector that have made government and private contributors more concerned with organizations' audits and audit
Two large, publicly owned firms are contemplating a merger. No operating synergy is expected. But, since returns on the 2 firms aren't perfectly positively correlated
Gentry Can Company's latest annual dividend of $1.25 a share was paid yesterday and maintained its historic 7% yearly rate of growth. You plan to buy the stock today because y
A company's capital structure consists solely of debt and common equity. It can issue debt at rd=11%, and its common stock currently pays a $2.00 dividend per share (Do=$2.0