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Suppose Bon Temps decided to issue preferred stock and would pay an annual dividend of $5.00 and that the issue price was $100.00 per share.

Suppose Bon Temps decided to issue preferred stock and would pay an annual dividend of $5.00 and that the issue price was $100.00 per share. What would be the stocks expected return? Would the expected rate of return be the same if the preferred was a perpetual issue or if it has a 20-year warranty?

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