Answered

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Find the after-tax return to a corporation that buys a share of preferred stock at $49, sells it at year-end at $49, and receives a $4 year-end dividend. The firm is in the 21% tax bracket.

This is what I got so far:

Before-tax:

(49-49)+4 = 4,

4/49 = 0.0816,

After-tax:

0.0816 (1-021) = 0.06448 or 6.45%

Sagot :

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