Determine if you be willing to buy the firms preferred stock

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Mini Case: Bond & Stock Valuation."

Please respond to the following:

• Determine the yield spread between the corporate bond and the Treasury bond.

• Alternatively, you are considering a purchase of Laissez-Faure's preferred stock. Assume that the preferred stock has a current market price of $42, a par value of $50, and dividend amount of 10% of par. Your required rate of return for investments of this type is 12.5%. Determine if you be willing to buy the firm's preferred stock. Why or why not?

Reference no: EM131563603

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