D) 8.675% 23) - 4 points - Maynard Inc. preferred stock pays an annual dividend of $7 per share. Which of the following statements is true for an investor with a required return of 9%? A) The value of the preferred stock is $ 7 because the dividend is fixed at $7 each year. B) The value of the preferred stock is $63.00 per share. C) The value of the preferred stock is $77.78 per share. D) The value of the preferred stock is $6.30 per share because of the 9% required return. 24) - 4 points - Because most preferred stocks are perpetuities, their value can be determined by dividing the annual dividend by an investor's required return. CIRCLE Answer: TRUE or FALSE 25) - 4 points - How is preferred stock similar to bonds? A) Dividend payments to preferred shareholders (much like bond interest payments to bondholders) are tax deductible. B) Investors can sue the firm if preferred dividend payments are not paid (much like bondholders can sue for non-payment of interest payments). C) Preferred stockholders receive a dividend payment (much like interest payments to bondholders) that is usually fixed. D) Preferred stock is not like bonds in any way. Page 6