Which option should dorothy choose

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Problem 1: Dorothy has $30,000 to invest and is considering a corporate bond that pays 7 percent annual interest or a non-dividend-paying stock that is expected to appreciate by 7 percent each year. Given that both investments are of similar risk, and the long-term capital gains tax rate is lower than the ordinary income tax rate, which option should Dorothy choose? Why?

Reference no: EM132962069

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