5. A preferred stock will pay a $6.00 dividend this year and selling for $90. It has a $100 Face value. The growth rate for the firms common stock is 10%. You require an 7% return for this type of investment. The maximum you would pay would be:

a. $90.00

b. 6.67%

c. $85.71

d. $200.00

e. 7%

6. The company expects to pay a dividend of $2.70 for its common stock this year and they have a constant growth rate of 9%. You require a 13% return on this stock. Based on this information, the maximum you would pay would be if you purchased the stock would be? The stock is selling for $70.

a. $67.50

b. $73.58

c. 12.86%

d. 13.20%