The valuation if preferred stock

The formula for the valuation of a share of preferred stock is P =D, / kp In this equation, the variable ky represents the Hailey is considering the purchase of 1,200 shares of the preferred stock of Houston Horticulture Company. The stock carries a par value of $100 per share and an annual dividend rate of 6.75%. Alternative investments of comparable risk are generating yields of 7.75%. Given this information, the per share value of Houston Horticulture's preferred stock should be $65.32 $87.10 $108.88 78,39 Hoiley has to postpone her purchase of Houston Horticulture's preferred shares for just over six months. By the time she is ready to invest, the return on alternative investments of comparable risk has increased. She should expect the cost of her investment in Houston Horticulture's preferred shares to be expensive Assume that Hailey delays her investment for another few months, and that when she is finally ready to make her 1,200 share investment in Houston Horticulture, the market price of Houston Horticulture's preferred stock has changed to $117.59 per share. If she pays this price to acquire cach share of Houston Horticulture's preferred stock, what rate of return will toiley eam on her investment? Remember that the shares have a par value of $100 and a dividend rate of 6.75% 4.59% 5.45% 05.74%