(Preferred stockvaluation) Pioneer's preferred stock is selling for $49 in the market and pays a $4.40 annual dividend.

a.If themarket's required yield is 8 percent, what is the value of the stock for thatinvestor?

b.Should the investor acquire thestock?

a.The value of the stock for that investor is $--- per share. (Round to the nearestcent.)

b.Should the investor acquire thestock? (Select from thedrop-down menus.)

The investor

should or should not

acquire the stock because it is currently

underpriced or overpriced in the market