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6. Microsoft Corp. has a preferred stock in their balance sheet. The preferred stock has a price of $20 and it will pay the investor
6. Microsoft Corp. has a preferred stock in their balance sheet. The preferred stock has a price of $20 and it will pay the investor $2.5 per share every year forever. What is the required return rate on this preferred stock? What is the duration of this preferred stock? (Hint: what type of cash flow does a preferred stock offer? How to calculate price of it?)
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