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The preferred stock of Tango Corp. pays a $ 2 5 per - share annual dividend indefinitely, starting from the end of Year 6 .

The preferred stock of Tango Corp. pays a $25 per-share annual dividend indefinitely,
starting from the end of Year 6. If the discount rate is 10%, calculate the fair price of this
preferred stock. If the current price of this preferred stock is $140, should we buy the
stock? Why?

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