F8-25

Yankee Athletic Club has preferred stock with a par value of $60 and an annual 6% cumulative dividend. Given the following prices for the preferred stock, what is each investor seeking for his or her return? a. Alex is willing to pay $40. b. Derek is willing to pay $25. c. Marcia is willing to pay $15. d. Johnny is willing to pay $5 *** a. If Alex is willing to pay $40 for the preferred stock, what rate of return is he seeking? % (Round to two decimal places) b. It Derek is willing to pay $25 for the preferred stock, what rate of return is he seeking? % (Round to two decimal places) c. If Marcia is willing to pay $15 for the preferred stock, what rate of return is she seeking? % (Round to two decimal places) d. If Johnny is willing to pay $5 for the preferred stock, what rate of return is he seeking? % (Round to two decimal places)