Johnston Corporation Is Growing at a Constant Rate of 6

question 47

Multiple Choice

Johnston Corporation is growing at a constant rate of 6 percent per year. It has both common stock and non-participating preferred stock outstanding. The cost of preferred stock (rps) is 8 percent. The par value of the preferred stock is $120, and the stock has a stated dividend of 10 percent of par. What is the market value of the preferred stock?

• A) $125
• B) $120
• C) $175
• D) $150
• E) $200

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Definitions:

Reinforcement

In psychology, a process by which an individual's behavior is conditioned by rewards or punishments.

Desired Behavior

The specific actions or responses that are sought after in individuals or groups within certain contexts or scenarios.

Specified Number

A particular or defined quantity.

Continuous Reinforcement

A reinforcement schedule in which a desired behavior is rewarded every time it is performed, encouraging the rapid acquisition of the behavior.