1. Preferred Stock Valuation (20 points). RSR Inc. has an outstanding preferred stock issue with a par value of $80 per share. The preferred shares pay dividends annually at a rate of 12 percent.
   1. What is the annual dividend on RSR preferred stock?
   2. If investors require a return of 14% on this stock and the next dividend is payable one year from now, what is the price of RSR preferred stock?
   3. Suppose that RSR has not paid dividends on its preferred shares in the last 3 years, but investors believe that it will start paying dividends again in one year. What is the value of RSR preferred stock if it is cumulative and if investors require a 14 percent rate of return?