E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $13 in perpetuity, beginning 10 years from now.    If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $13 in perpetuity, beginning 10 years from now.

  

If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today?
 

 

Multiple Choice
  •  
    $128.24
  •  
    $216.67
  •  
    $134.66
  •  
    $121.83
  •  
    $120.99
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