Carter Corporation has some money to invest and its treasureris choosing between

Carter Corporation has some money to invest and its treasureris choosing between City of Chicago municipal bonds and U.S.Treasury bonds. Both have the same maturity and they are equallyrisky and liquid. If Treasury bonds yield 6 percent and Cartersmarginal income tax rate is 40 percent what yield on theChicagomunicipal bonds would make Carters treasurer indifferentbetween the two?2.40%3.60%4.50%5.25%6.00%As a corporate investor paying a marginal tax rate of 34 percentif 70 percent of dividends are excludable what would be yourafter-tax dividend yield on preferred stock with a 16 percentbefore-tax dividend yield?6.36%7.36%12.19%13.01%14.37%