Explore BrainMass

Explore BrainMass

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

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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.)

    © BrainMass Inc. brainmass.com June 4, 2020, 12:25 am ad1c9bdddf
    https://brainmass.com/business/accounting/which-is-the-best-investment-after-tax-returns-for-abc-cor-337541

    Solution Preview

    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: ...

    Solution Summary

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

    $2.19

    ADVERTISEMENT