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Which is the best investment, After-Tax Returns, for ABC Cor

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ABC Corporation has $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: Spartan County tax-free municipal bonds yielding 8 percent; Ford bonds yielding 11.5 percent; GE preferred stock with a dividend yield of 12 percent. ABC's corporate tax rate is 35 percent.

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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After-Tax Returns

ABC Corporation has $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: ...

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This solution is comprised of a detailed explanation to answer what is the after-tax return on the best investment alternative.

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