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    What Price Should the Stock Sell For?

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    Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $7.50 per share. If the required return on this preferred stock is 6.5%, at what price should the stock sell?

    a. $104.27
    b. $106.95
    c. $109.69
    d. $112.50
    e. $115.38.

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    Solution Summary

    The solution discusses what price the stock should sell for.