Based on the following information concerning Ford preferred stock,
Preferred dividend per share: $9
Beta: 0.85
Risk free rate: 5%
Market risk premium: 6%
Calculate the expected price in 4 years. You expect the risk free rate to decrease to 3% and the market risk premium to increase to 10% in 4 years.
a. $78.26
b. $76.43
c. $74.22
d. $80.65