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    Investments Study Set 2
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    Exam 14: The Valuation of Fixed-Income Securities
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    If a Preferred Stock Pays an Annual $4
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If a Preferred Stock Pays an Annual $4

Question 3

Question 3

Essay

If a preferred stock pays an annual $4.50 dividend, what should be the price of the stock if comparable yields are 10 percent? What would be the loss if yields rose to 12 percent?

Correct Answer:

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