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You estimate the beta of a preferred stock youre considering buying at 1.2. The risk free rate is 3% currently and the market is expected
You estimate the beta of a preferred stock youre considering buying at 1.2. The risk free rate is 3% currently and the market is expected to return investors 8% (over the long run, maybe not tomorrow!). The preferred dividend is $140 per year per share. If it turns out that the beta of the stock is 1.0, what is likely to happen to the value of your investment? By how much, exactly?
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