What is the after-tax return on the preferred stock

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Reference no: EM13927586

Lovell Co. purchased preferred stock in another company. The preferred stock’s before-tax yield was 8.4%. The corporate tax rate is 40%. What is the after-tax return on the preferred stock, assuming a 70% dividend exclusion?

A. 7.02%

B. 7.39%

C. 7.76%

D. 8.15%

E. 8.56%

Reference no: EM13927586

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