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    After- tax returns

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    Please help with the following problem with step by step calculations.

    West Corporations was $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: Alachua county tax-free municipal bonds yielding 6 percent; Exxon bonds yielding 9.5 percent; GM preferred stock with a dividend yield of 9 percent. West's corporate tax rate is 35%. What is the after-tax return on the best investment alternative? (Assume the company chooses on the basis of after-tax returns.)

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    https://brainmass.com/business/accounting/after-tax-returns-243919

    Solution Preview

    Problem: West Corporations was $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: Alachua county tax-free municipal bonds yielding 6 percent; Exxon bonds yielding 9.5 percent; ...

    Solution Summary

    This posting helps with after-tax returns. The solution explains how to determine the best investment alternative based on after tax returns. Step by step calculations are provided for this problem.

    $2.19

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