Preferred stock pays an annual dividend

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1. Mike is considering an investment that will pay $9,400 a year for four years, starting one year from today. What is the present value of this investment if he desires a rate of return of 10.2 percent?

A. $17,899.08

B. $19,117.36

C. $20,186.75

D. $29,668.19

E. $38,153.55

2. Jennifer wants to have $735,000 in an investment account five years from now. The account will pay .58 percent interest per month. If she saves money every month, starting one month from now, how much will she have to save each month to reach her goal?

A. $9,062.07

B. $9,497.03

C. $9,838.22

D. $10,101.03

E. $10,277.01

3. A preferred stock pays an annual dividend of $5.20. What is one share of this stock worth to you today if you require a rate of return of 12 percent?

A. $56.14

B. $37.98

C. $43.33

D. $40.91

E. $38.56

Reference no: EM131523242

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