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A preferred stock pays an annual dividend of $6.50 a share and has an annual rate of return of 7.35%. What is the stock price?
A preferred stock pays an annual dividend of $6.50 a share and has an annual rate of return of 7.35%. What is the stock price?
Note: Assume the dividend is paid out every year forever. Since the investors earn a constant stream of cash indefinitely, the preferred stock can be treated as a perpetuity.
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