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1. PREFERRED STOCK VALUATION

Farley Inc. has perpetual preferred stock outstanding that sells for $34.00 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

_____%

2. A share of common stock has just paid a dividend of $4.00. If the expected long-run growth rate for this stock is 5 percent, and if investors require a 17 percent rate of return, what is the expected price of the stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92748984

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