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You are considering an investment in one of two preferred​ stocks, TCF Capital or TAYC Capital...

You are considering an investment in one of two preferred​ stocks, TCF Capital or TAYC Capital Trust. TCF Capital pays an annual dividend of $ 2.19 $2.19​, while TAYC Capital pays an annual dividend of $ 1.94 $1.94. If your required return is 11 11 ​percent, what value would you assign to the​ stocks? The value of the TCF Capital preferred stock is ​$ nothing per share.  ​(Round to the nearest​ cent.) The value of the TAYC Capital preferred stock is ​$ nothing per share.

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Answer #1

Price of the share of TCF IS =Dividend paid / required rate of return

=2.19$ / 11%=$ 19.91

Price of the share of TAYC IS =Dividend paid / required rate of return

=1.94$ / 11%=$ 17.64

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