# Question: Pioneer preferred stock is selling for 33 per share

Pioneer preferred stock is selling for $ 33 per share in the market and pays a $ 3.60 annual dividend. a. What is the expected rate of return on the stock? b. If an investor’s required rate of return is 10 percent, what is the value of the stock for that investor? c. Should the investor acquire the stock?

## Answer to relevant Questions

You are considering an investment in one of two preferred stocks, TCF Capital or TAYC Capital Trust. TCF Capital pays an annual dividend of $ 2.69, while TAYC Capital pays an annual dividend of $ 2.44. If your required ...Why do firms calculate their weighted average cost of capital? Compute the cost for the following sources of financing: a. A $ 1,000 par value bond with a market price of $ 970 and a coupon interest rate of 10 percent. Flotation costs for a new issue would be approximately 5 percent. ...Compute the cost of the following: a. A bond that has $ 1,000 par value (face value) and a contract or coupon interest rate of 11 percent. A new issue would have a flotation cost of 5 percent of the $ 1,125 market value. ...Why is capital budgeting such an important process? Why are capital- budgeting errors so costly?Post your question