When the government bailed out the banking system, they put funds into banks by buying Senior Preferred Stock from the banks at the following terms:

Face Value: $1,000/share.

Annual Dividend Rate (paid quarterly) First 5 years: 5%.

Thereafter: 9%.

If the market rate of interest on a particularly risky bank was 10% (annual), what would the efficient market value of the preferred stock have been at the time of issue if investors expected it to remain in perpetuity?

Group of answer choices

$1,094.86

$805.14

$730.71

$744.11