Question

Asked Dec 10, 2019

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Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $2.00 per share. If the required return on this preferred stock is 6.5%, then at what price should the stock sell?

Step 1

The selling price for the preferred stock can be calculated with the help of below expression:

Step 2

Substitute $2 for dividend and 6...

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