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November 23, 2014

Homework Help: investments

Posted by mia on Saturday, July 14, 2007 at 1:40pm.

In 2004, Montpellier inc.issued a $100 par value preferred stock that pays a 9% annual dividend. Due to changes in the overall economy and in the company's financial condition investors ar now requiring a 10% return.

What price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?

I would pay $90 per share.

Thanks!

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