DD/PA is a preferred stock that last traded at $82. It has a $0.875 quarterly dividend. You
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Question:
- DD/PA is a preferred stock that last traded at $82. It has a $0.875quarterlydividend. You need to earn at least 5% per year to invest in this stock. What price are you willing to pay, using the constant growth model?
- Do you buy this stock at $82?
- What kind of return,i, is implied by a price of $82?
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