Arash corporation is trying to choose between three, Ask an Expert

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Arash Corporation is trying to choose between three alternative investments. The three securities that the company is considering are as follows:

• Tax-free municipal bonds with a return of 7.30%.

• Ray Corporation bonds with a return of 10.90%.

• Rez Corp. preferred stock with a return of 11.50%.

The company’s tax rate is 25% and dividend exclusion rate is 70%. What is the after-tax return on the best investment alternative? Show all work.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92781673

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