Determine whether or not the preferred stock provided

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Question - (Ignore income taxes in this problem.) Five years ago, Amir purchased 600 shares of 9%, $100 par value preferred stock for $70 per share. Amir received dividends on the stock each year for five years, and finally sold the stock for $90 per share. Instead of purchasing the preferred stock, Amir could have invested the funds in a money market certificate yielding a 16% rate of return.

Required - Determine whether or not the preferred stock provided at least the 16% rate of return that could have been received on the money market certificate.

A. No, because NPV is ($1,384)

B. Yes, because NPV is $1,384

C. It doesn't matter because NPV is $0

D. none of the above

Reference no: EM132988105

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