arpon Bay Industries preferred stock pays an annual dividend of $3.50 per share. If the risk-free rate is 2.5%, the expected return on the market is 7%, and Tarpon Bay's preferred stock is only 4/5 as risky as the market on average, what is the most that an investor should be willing to pay for a share of Tarpon Bay preferred stock TODAY?

Question content area bottom

Part 1

A.

$43.21

B.

$37.53

C.

$23.68

D.

$57.38