J&J foods wants to issue some 7 percent preferred stock that has a stated liquidating value of 100 a share. The company has determined that the stocks with similar characteristics provide a 12.8% rate of return. What should the offer price be?

J&J foods wants to issue some 7 percent preferred stock that has a stated liquidating value of 100 a share. The company has determined that the stocks with similar characteristics provide a 12.8% rate of return. What should the offer price be?



Answer: 54.69 (Approx)


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