Issue of preferred stock outstanding

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Reference no: EM131837771

1. Oberholser, Inc., has an issue of preferred stock outstanding that pays a dividend of $6.95 every year in perpetuity. If this issue currently sells for $90 per share, what is the required return?

2. Gruber Corp. pays a constant $9.35 dividend on its stock. The company will maintain this dividend for the next 10 years and will then cease paying dividends forever. If the required return on this stock is 10 percent, what is the current share price?

Reference no: EM131837771

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