Preferred Stock Yield-To-Maturity: Durango Water Works Has an Outstanding Issue

question 30

Multiple Choice

Preferred Stock Yield-to-Maturity: Durango Water Works has an outstanding issue of preferred stock that has a par (maturity value) of $75.00. The stock, which pays a quarterly dividend of $1.10, will be retired by the firm in 20 years. If the preferred stock is currently selling for $68.00, what is the preferred stock's yield-to-maturity? (Round off to the nearest 0.01%)

• A) 6.72%
• B) 5.64%
• C) 4.28%
• D) 7.73%

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Definitions:

Pharyngotympanic Tube

Also known as the Eustachian tube, it connects the middle ear to the nasopharynx, helping equalize air pressure on both sides of the eardrum.

Endolymph

Endolymph is a fluid within the inner ear that fills the cochlear duct and vestibular system, essential for hearing and maintaining balance.

Perilymph

The fluid that is found within the inner ear's bony labyrinth, surrounding and protecting the membranous labyrinth.

Eardrum

A thin membrane that separates the external ear from the middle ear, vibrating in response to sound waves.