(Preferred stock valuation) Haney, Inc.'s preferred stock is selling for $21.50 per share in the market and pays a $2.50 annual dividend.

a. What is the expected rate of return on the stock? ______% (Round to two decimal places.)

b. If an investor's required rate of return is 12 percent, what is the value of the stock for that investor? $_____.

c. Should the investor acquire the stock ______?

(Preferred stock valuation) What is the value of a preferred stock when the dividend rate is 15 percent on a $125 par value? The appropriate discount rate for a stock of this risk level is 15 percent.

The value of the preferred stock is $_____. (Round to the nearest cent.)