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J&J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100...

J&J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100 a share. The company has determined that stocks with similar characteristics provide a return of 8.2 percent. What should the offer price be?
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Answer #1

Offer price = (0.054 × $100) / 0.082

Offer price = $65.85   

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