Question: Suppose you purchased a $50 par value preferred stock. The stock's price is $48 per share and it pays a 10% dividend rate per year.

Suppose you purchased a $50 par value preferred stock. The stock's price is $48 per share and it pays a 10% dividend rate per year. Investors require a 13% rate of return on the stock and the marginal tax rate is 34%. What is the expected return on this preferred stock? 10.8% D 11.3% O 8.9% O 10.42% 6.88%

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