a. A $50 par value preferred stock pays a quarterly dividend of $.50 and you require a return of 6% on this investment based on the risk you are taking. *Note: Dividend used in valuation should be adjusted to annual dividend. If the stock is perpetual, what is the value of this stock? Find the value of a perpetuity b. If the stock is required to be retired after 10 more years, what is the value of this stock? When a preferred stock is retired the company buys the stock back from you at par value. Find the PV of cash flows - similar to a bond. c. Why is the perpetual stock that pays dividends forever worth less than the stock that gets retired in 10 years