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b ) Assume a preferred stock A has a$ 1 0 0 par value and a dividend of $ 8 a year. Because of inflation,

b) Assume a preferred stock A has a$100 par value and a dividend of $8 a year. Because of inflation, uncertainties and tax advantage, the required rate of return is 9%. Calculate the value of this preferred stock A. Also, if the market price of preferred stock A is $95, would you buy it? How about if its $80?

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