expected refum) You own 100 shares of Shapard Resources preferred stock, which currently sels for $45...

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expected refum) You own 100 shares of Shapard Resources preferred stock, which currently sels for $45 per share and pays annu

business finance

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Answer 1

Answer #1

a.

Price of Preferred Stock = Annual Dividend/Interest Rate

So,

Interest Rate = 4.75/45

Interest Rate = 10.56%

b.

If one requires 8% return, then one should invest in the preferred stock as it is returning 10.56%

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Answer 2

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expected refum) You own 100 shares of Shapard Resources preferred stock, which currently sels for $45...

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(Preferred stockholder expected retum) You own 300 shares of Dalton Resources preferred stock, which currently sells...

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expected refum) You own 100 shares of Shapard Resources preferred stock, which currently sels for $45...

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