Multiple Choice
Patrick Company expects to generate free-cash of $120,000 per year forever. If the firm's required return is 12 percent, the market value of debt is $300,000, the market value of preferred stock is $70,000, and the company has 100,000 shares of stock outstanding. What is the value of Patrick's stock?
A) $6.30
B) $10.00
C) $7.00
D) $9.70
Correct Answer:
Verified
Correct Answer:
Verified
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