Keyes Corporation preferred stock pays an annual dividend of $5 per share. Which of the following statements is true for an investor with a required return of 8%?

Select one:

a. The value of the preferred stock is $62.50 per share

b. The value of the preferred stock is $40.00 per share

c. The value of the preferred stock is $4 per share because of the 8% required return

d. The value of the preferred stock is $5 because the dividend is fixed at $5 each year