J&J Foods wants to issue some 7 percent preferred stock that has a stated liquidating value of $100 a share

J&J Foods wants to issue some 7 percent preferred stock that has a stated liquidating value of $100 a share. The company has determined that stocks with similar characteristics provide a 12.8 percent rate of return. What should the offer price be?    A.  $37.26 B.  $41.38 C.  $48.20 D.  $54.69 E.  $62.60

95.	The preferred stock of Rail Lines, Inc., pays an annual dividend of $12.25 and sells for $59.70 a share. What is the rate of return on this security?    A.  19.38 percent B.  19.63 percent C.  20.52 percent D.  20.72 percent E.  20.84 percent R = $12.25/$59.70 = 20.52 percent

96.

Marie owns shares of Deltona Productions preferred stock which she says provides her with a constant 14.3 percent rate of return. The stock is currently priced at $45.45 a share. What is the amount of the dividend per share?    A.  $6.00 B.  $6.25 C.  $6.50 D.  $6.60 E.  $7.00 D = 0.143 × $45.45 = $6.50

97.	Zylo, Inc. preferred stock pays a $7.50 annual dividend. What is the maximum price you are willing to pay for one share of this stock today if your required return is 7.5 percent?    A.  $32.26 B.  $35.48 C.  $72.68 D.  $100.00 E.  $107.50 P0 = $7.50/0.075 = $100.00