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Stocks, Stock Valuation, and Stock Market Equilibrium

Gary Wells Inc. plans to issue perpetual preferred stock with an annual dividend of $6.50 per share. If the required return on this preferred stock is 6.5%, at what price should the stock sell?

A. $90.37
B. $92.69
C. $95.06
D. $97.50
E. $100.00

Solution Summary

The solution explains how to calculate the price of a preferred stock concisely.