### What is the breakeven corporate tax rate

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Mantle Corporation is considering two equally risky investments:

• A \$5,000 investment in preferred stock that yields 7.75%.
• A \$5,000 investment in a corporate bond that yields 10%.

What is the breakeven corporate tax rate that makes the company indifferent between the two investments? Assume a 70% dividend exclusion for tax on dividends. (Do not round your intermediate answer and round your final answer to two decimal places.)

Could you show me how to calculate the answer?

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