The following preferred stocks are returning 8.5% to their owners who purchased the shares when they...

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The following preferred stocks are returning 8.5% to their owners who purchased the shares when they...

The following preferred stocks are returning 8.5% to their owners who purchased the shares when they were issued. Calculate the prices at which they were issued. Round your answers to the nearest dollar.

Stock	Dividend	Current Price
A	5%	$15
B	6	41
C	10	130

Stock A.
$
Stock B.
$
Stock C.
$

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Answer 1

Answer #1

Issue price= current return × current price / dividend percentage

A= 8.5% × 15 /5%= 0.085× 300

A= 25.5

B= 8.5% × 41/6%= 0.085 ×683.33

B= 58.08

C=8.5% × 130/10%=0.085×

C= 110.5

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Answer 2

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