Company has preferred stock with current market price

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1. A company has preferred stock with a current market price of $16.50 per share. The preferred stock pays an annual dividend of 4% based on a par value of $100. The company's marginal tax rate is 40%. Therefore, the cost of preferred stock is?

2. If the Market Risk Premium for the entire stock market is 10.9 percent and U.S. Treasury securities are yielding 1.6 percent, what is the expected return for a stock that has a beta of 0.8?

Reference no: EM131856876

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