60) What is the value of a preferred stock that pays a $3.50 dividend to an inve

Question

60) What is the value of a preferred stock that pays a $3.50 dividend to an investor
with a required rate of return of 9% (round your answer to the nearest
$1)?
a. $23
b. $39
c. $31.50
d. $17
61) Preferred stock differs from common stock in that
a. preferred stock dividends are fi xed.
b. common stock investors have a required return and preferred stock investors
do not.
c. preferred stock investors have a higher required return than common stock
investors.
d. preferred stock usually has a maturity date.

Explanation / Answer

60)3.50/.09= 38.89= 39 B 61)A

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