What is the most you would be willing to pay for the stock

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Reference no: EM131856768

1. You are considering purchasing a share of preferred stock. The dividend on the preferred stock is $4.00. You have a required rate of return of 7%. What is the most you would be willing to pay for the stock?

2. The current price of a non-dividend paying asset is $65, the riskless interest rate is 5% p.a. continuously compounded, and the option maturity is five years. What is the lower boundary for the value of a European vanilla put option on this asset with strike price of $80?

Reference no: EM131856768

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