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The First Bank of Flagstaff has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of

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Answer #1

Calculation of current price:

Quarterly Dividend= $1.65

Annual dividend= 1.65*4= $6.60

Current price= dividend/required return= 6.6/0.116= 56.90

Current price is $56.90

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