ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is
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ABC Inc. is considering an investment in the preferred stock of IBM Corporation. The preferred stock is currently selling for $100 per share with a $5.00 annual dividend ABC Inc anticipates a one-year holding period and expects to sell the stock at $100 The corporation is at a 20% average tax rate and the annual interest rate is 8%. Calculate the after-tax rate of return.
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