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A bond issued by the State of Pennsylvania provides a 9.25% yield. What yield on a Synthetic Chemical Company bond would cause the two bonds to provide the same after-tax rate of return to an investor in the 35.00% tax bracket? (Round your final answer to two decimal places.) O a. 6.01% b. 12.49% C. 6.85% d. 14.2396 e. 26,4396 A corporation recently purchased some preferred stock that has a before-tax yield of 5-75%. The company has a tax rate of 25%. What is the after-tax return on the preferred stock? Assume a 50% dividend exclusion for taxes on dividends. (Round your final answer to two decimal places.) O a. 1.4496 O b. 3.5996 c. 2.8896 d. 5.0396 O e. 4.3196 A new firm is developing its business plan. It will require $680,000 of assets (which equals total invested capital), and it projects $400,000 of sales and $275,000 of operating costs for the first year. Management is reasonably sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7-5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. The firm will use only debt and common equity for financing. What is the maximum debt to capital ratio (measured as debt/total invested capital) the firm can use? (Hint: Find the maximum dollars of interest, then the debt that produces that interest, and then the related debt to capital ratio.) Do not round your intermediate calculations. a. 34.80% b. 61.279 O c. 45.96% d. 38.7396 e. 73.53%

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