In 2004,Smiths Corp

question 24

Multiple Choice

In 2004,Smiths Corp.issued a $50 par value preferred stock that pays a 6 percent annual dividend.Due to changes in the overall economy and in the company's financial condition investors are now requiring an 7 percent return.What price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?

• A) $42.86
• B) $30.00
• C) $31.54
• D) $33.38
• E) $38.37

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