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Food Inc. has failed to sell any type of debt. The company has 40,000 common shares outstanding, and 10,000 preferred shares outstanding. The preferred shares
Food Inc. has failed to sell any type of debt. The company has 40,000 common shares outstanding, and 10,000 preferred shares outstanding. The preferred shares pay $2.00 per year in dividends and are traded at $40 per share. The last dividend paid to common stockholders was $5 per share and the company expects to grow at 2% forever. The current price of the common stock is $80. What is the expected return on the common stock? 10.001% 8.375% 9.256% 7.516% 6.678%
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