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Calculate the market value of outstanding preferred share

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Reference no: EM132642723

Jones Design wishes to estimate the value of its outstanding preferred shares. The preferred shares have an RMBD par value and pay an annual dividend of RM6.4O per share.

Problem i. Calculate the market value of the outstanding preferred share given that the required rate of return is 9.3 percent.

Problem ii. Calculate the market value of the outstanding preferred share given that the required rate of return is 10.5 percent.

Problem iii. Based your answer on i and ii. discuss the relationship between price and required rate of return

Reference no: EM132642723

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