What is the maximum price that should be paid for the stock

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Problem a) If a preferred stock pays an annual dividend of $6 and investors can earn 10 per-cent on alternative and comparable investments, what is the maximum price that should be paid for this stock?

Problem b) If the preferred stock in part (a) had a call feature and investors expected the stock to be called for $100 after 10 years, what is the maximum price that investors should pay for the stock?

Reference no: EM132906658

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