The Omega Corporation has some excess cash it would like to invest in marketable securities for a long-term hold. Its Vice-President of Finance is considering three investments: (a) Treasury bonds at a 7 percent yield; (b) corporate bonds at a 13 percent yield; or (c) preferred stock at an 9 percent yield. Omega Corporation is in a 40 percent tax bracket and the tax rate on dividends is 10 percent. a-1. Compute the aftertax yields for the three investment options. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.).

1. The Omega Corporation has some excess cash it would like to invest in marketable securities for
a long-term hold. Its Vice-President of Finance is considering three investments: (a) Treasury
bonds at a 7 percent yield; (b) corporate bonds at a 13 percent yield; or (c) preferred stock at an 9
percent yield. Omega Corporation is in a 40 percent tax bracket and the tax rate on dividends is
10 percent. a-1. Compute the aftertax yields for the three investment options. (Do not round
intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)