Question: ' Q - 1 ( Preferred stock expected return ) You are planning to purchase 100 shares of preferred stock and must choose between Stock

Q - 1

(Preferred stock expected return) You are planning to purchase 100shares of preferred stock and must choose between Stock A and Stock B. Stock A pays an annual dividend of $4.50and is currently selling for $35. Stock B pays an annual dividend of $4.25and is selling for $36. If your required return is 12percent, which stock should youchoose?

What is the expected return of StockA? __________% (Round to two decimalplaces.)

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