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Simon Brothers has perpetual preferred stock outstanding that sells for $17.25 a share and pays a dividend of $2.42 at the end of each year.

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Simon Brothers has perpetual preferred stock outstanding that sells for $17.25 a share and pays a dividend of $2.42 at the end of each year. What is the expected rate of return? Oa) 11.26% b) 12.57% c) 14.03% d) 16.41% e) 18.98% Assume that the real risk-free rate is 1.0% and the average annual expected inflation rate is 3%. The DRP and LP for Bond A are each 2%, and the applicable MRP is 1%. What is Bond A's interest rate? a) 3.50% b) 5.50% c) 9.00% d) 11.00% e) 12.00%

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