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    Practice Problem

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    Walk me through the steps to do this on a TI BA II Plus and the rationale.

    Omega / Alpha Ltd. sold a Preferred stock issue 3 years ago. This Preferred stock has a
    maturity 20 years from its issue date and pays a $3.00 annual dividend which provides a 12% to its original investors. Since this Preferred stock was sold interest rates (our old friend krf) have increased, and if O / A were to sell like Preferred stock today it would carry a 15% return to its original investors.

    Calculate the current market price of this issue of O / A's Preferred stock.

    SHOW ALL WORK.

    © BrainMass Inc. brainmass.com March 4, 2021, 5:46 pm ad1c9bdddf
    https://brainmass.com/business/finance/practice-problem-10334

    Solution Preview

    The stock has 17 years remaining (20-3)
    <br>
    <br>Assume dividend pays at the end of the year, therefore a dividend just paid and the next one will be in one years' ...

    $2.19

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