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PROBLEM 5: Valuation of Stock An investment banking firm is evaluating a preferred stock with...

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PROBLEM 5: Valuation of Stock An investment banking firm is evaluating a preferred stock with a par value of $100 and which pays an annual dividend of $5.30 per share. The market required return is 7%. Questions: a. What is the market value of the preferred stock? b. Suppose an investor purchased the preferred stock today, held it for one year, and sold it upon receiving the dividend. If the market required return is 8% when he sold the preferred stock, what is the investor's total rate of return

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