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Miller/Hershey's Preferred Stock Is Selling at $54 on the Market

question 91

Essay

Miller/Hershey's preferred stock is selling at $54 on the market and pays an annual dividend of $4.20 per share.
a. What is the expected rate of return on the stock?
b. If an investor's required rate of return is 9%, what is the value of the stock for that investor?
c. Considering the investor's required rate of return, does this stock seem to be a desirable investment?


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