Question: Question 12 ( 10 point) Timeless Inc just issued a $135 par value preferred stock. The stock pays quarterly dividends and a 11% dividend rate

Question 12 ( 10 point) Timeless Inc just issued a $135

Question 12 ( 10 point) Timeless Inc just issued a $135 par value preferred stock. The stock pays quarterly dividends and a 11% dividend rate for the next 20 years. The stock has a required return of 2.4%. (Hint: this means the preferred stock will pay back the par value at the end of the 20th year and then no longer make any further payments afterwards. The dividend rate is like the coupon rate of a bond.) a. What is the price of the stock today? b. Timeless Inc just completed a large project, and it will bring about large amount of profit to them. Therefore, instead of giving out divides for only 20 years, they will give out quarterly dividends till forever. Given that the dividend rate and required return remain the same, what is the price of the stock today

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