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# Effective Rate: Quarterly dividend = $3.38 / 4 = $0.845 Quarterly return = $0.845/$43.50 = 1.94% Effective annual rate = (1.0194)4 -1 = 08.00% b.

Effective Rate: Quarterly dividend = $3.38 / 4 = $0.845 Quarterly return = $0.845/$43.50 = 1.94% Effective annual rate = (1.0194)4 -1 = 08.00% b. What is the value of the preferred stock if it has a sinking fund in which 20% of initial issue of stock was redeemed annually at par ($100) and the required nominal return is 9.76%?