Fenway Athletic Club plans to offer its members preferred stock with a par value of $100 and

Question:

Fenway Athletic Club plans to offer its members preferred stock with a par value of $100 and a 6% annual dividend rate. If a member wants the following returns, what price should he or she willing to pay?

a. Theo wants a 10% return.

b. Jonathan wants a 12% return

c. Josh wants a 15% return

d. Terry wants an 18% return

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...