You buy preferred stock in a company that pays you a fixed dividend of $4.50 each year the company is in business. If we assume that the company will go on indefinitely, the preferred stock can be valued as a perpetuity. If the discount rate on the preferred stock is 12%, the present value of the perpetuity?

a.

$36.6

b.

$37.5

c.

$30.5

d.

$38

e.

$25