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Chambers Rosewood Pty Ltd issued perpetual preference shares a few years ago. The company pays an annual dividend of $4.27, and your required rate of

Chambers Rosewood Pty Ltd issued perpetual preference shares a few years ago. The company pays an annual dividend of $4.27, and your required rate of return is 12.2 per cent.

a. What is the value of the share given your required rate of return?

b. Should you buy this share if its current market price is $34.41? Explain.

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