A) B)

A company's preferred shares pay a $1.25 dividend every three months in perpetuity. What is the fair market value of the shares just after payment of a dividend if the rate of return required by the market on shares of similar risk is 6% compounded quarterly? (Round your answer to the nearest cent.) Fair market value Mrs. McTavish wants to establish an annual $5,000 scholarship in memory of her husband. The first scholarship is to be awarded two years from now. If the funds can earn 6.25% compounded annually, what amount must Mrs. McTavish pay now to sustain the scholarship in perpetuity? (Round your answer to the nearest cent.) Mrs. McTavish must pay $