P16.5 CJ Co. has a preference share outstanding that pays annual dividends of $3.50 a share. At

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P16.5 CJ Co. has a preference share outstanding that pays annual dividends of $3.50 a share. At what price would this share be trading if market yields were 7.5%? Use one of the dividend valuation models (from Chapter 8) to price this share, assuming you have a 7.5% required rate of return. Are there any similarities between the two prices? Explain.

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Fundamentals Of Investing

ISBN: 9781442532885

3rd Edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott Smart, Roger Juchau, Donald Ross, Sue Wright

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