What should be the market value of the preferred stock

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Reference no: EM13928009

Please provide the inputs for the financial calc. as well as any other work needed

The Jones Company has decided to undertake a large project. Consequently, there is a need for additional funds. The CFO plans to issue preferred stock with a perpetual annual dividend of $5 per share and a par value of $30. If the required rate of return (r_p) on this stock is currently 20%, what should be the market value of the preferred stock?

a. $150

b. $100

c. $ 50

d. $ 25

e. $ 10

Reference no: EM13928009

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