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Question
Maynard Inc. preferred stock pays an annual dividend of $7 per share. Which of the following statements is true for an investor with a required return of 9%?A) The value of the preferred stock is $7 because the dividend is fixed at $7 each year .
B) The value of the preferred stock is $63.00 per share.
C) The value of the preferred stock is $77.78 per share.
D) The value of the preferred stock is $6.30 per share because of the 9% required return.
Answer
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