Arvo Corporation is trying to choose between three alternative investments. The three securities that the company is considering are as follows: ? Tax-free municipal bonds with a return of 8.80%.? Wooli Corporation bonds with a return of 11.75%.? CFI Corp. preferred stock with a return of 9.80%.? The company's tax rate is 35.00%. What is the after-tax return on the best investment alternative? Assume a 70.00% dividend exclusion for tax on dividends. (Round your final answer to 3 decimal places.)
A. 8.800%
B. 8.624%
C. 9.064%
D. 8.448%
E. 9.504%
Answer: A
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