Molen Inchas an Outstanding Issue of Perpetual Preferred Stock with an an Annual

question 67

Multiple Choice

Molen Inc.has an outstanding issue of perpetual preferred stock with an annual dividend of $7.50 per share.If the required return on this preferred stock is 6.5%, at what price should the preferred stock sell?

• A)$104.27
• B)$106.95
• C)$109.69
• D)$112.50
• E)$115.38

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Definitions:

Primary Growth

Of plants, lengthening of young shoots and roots; originates at apical meristems.

Secondary Growth

Of plants, thickening of older stems and roots; originates at lateral meristems.

Temperate Zone

A climate zone lying between the tropical and polar zones, characterized by moderate temperatures.

Protective Covering

A material or structure that provides defense against external environmental hazards.