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    Fuel, Inc: Preferred Stock sells for $46. What is the required return?

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    Is there a way to do this on a spreadsheet? If so, please show me.

    Fuel, Inc., has an issue of preferred stock outstanding that pays a $4.50 dividend every year, in perpetuity. If this issue currently sells for $46 per share, what is the required return?

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    The problem is simple; you don't have to use infinite series of dividends to calculate ...

    Solution Summary

    The solution computes the problem without the use of Excel by explaining a simple method to arrive at the answer.