1. A preferred stock has an annual dividend of $8.35, and the required rate of return is 5%. What is the value of the preferred stock?
$8.35
$16.70
$167.00
$170.60
2. What is the weighted average cost of capital (WACC) used for?
to determine a firm’s taxable income
to evaluate fluctuations in the market
to determine the value of a company’s stock
to evaluate investment possibilities