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3. (15 points) A corporation XYZ issued a preferred stock that promises to pay $5 dividend each quarter for the next 10 years (the first

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3. (15 points) A corporation XYZ issued a preferred stock that promises to pay $5 dividend each quarter for the next 10 years (the first payment is going to arrive in one quarter). After that, the dividends will be permanently increased to $7 per quarter. An effective annual rate is 7.99%. (a) (5 points) What is a correct interest rate you need to use to discount dividends? (b) (10 points) What should be the the price of such a stock

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