Johnston Corporation Is Growing at a Constant Rate of 6

Multiple Choice

Johnston Corporation is growing at a constant rate of 6 percent per year. It has both common stock and non-participating preferred stock outstanding. The cost of preferred stock (rps) is 8 percent. The par value of the preferred stock is $120, and the stock has a stated dividend of 10 percent of par. What is the market value of the preferred stock?

A) $125
B) $120
C) $175
D) $150
E) $200