Department 65 has an issue of preferred stock that pays a, Ask an Expert

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Department 65 has an issue of preferred stock that pays a dividend of $4.00. The preferred stockholders require a rate of return on this stock of 9%. At what price should the preferred stock sell for? Round off to the nearest $0.10.

a. $36.00
b. $44.40
c. $62.50
d. $88.80

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