What would you be willing to pay for the stock

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Reference no: EM13949897

The BJS Company is issuing preferred stock that will pay an annual dividend of $5.

(a) If you require a 12% return on the stock, what is the most you would be willing to pay for the stock?

(b) If rates of return available in the market decline and you now require only a 10% rate of return, what would you be willing to pay for the stock?

(c) Suppose that BJS experiences a severe financial decline, and you require a 20% return on the stock. What is the most you would pay for the stock? 

Reference no: EM13949897

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