document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=72879>Question 72879</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Style Corporation preferred stock pays a dividen of $3.15 a year. What is the value of the stock if the required rate of return is 8.5%? (Round your answer to the nearest $1)<BR>\n" );
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document.write( "A. $23<BR>\n" );
document.write( "B. $27<BR>\n" );
document.write( "C. $33<BR>\n" );
document.write( "D. $37<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #52126 by </B><A HREF=/tutors/aboutme.mpl?userid=bucky><B>bucky(2189)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=bucky><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=52126\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> You have invested a certain sum of money (unknown) and every year you collect 8.5% of that<BR>\n" );
document.write( "investment as interest. So we can say that 8.5% of the sum (S) equals $3.15.<BR>\n" );
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document.write( "In equation form this becomes:<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=3.15+=+%280.085%29%2AS ALIGN=MIDDLE  ALT=\"3.15+=+%280.085%29%2AS\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
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document.write( "Notice that the decimal (0.85) is equivalent to 8.5%.<BR>\n" );
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document.write( "Solve this equation by dividing both sides by (0.085). When you do you get:<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=3.15%2F0.085+=+%280.085%29%2F%280.085%29%2AS ALIGN=MIDDLE  ALT=\"3.15%2F0.085+=+%280.085%29%2F%280.085%29%2AS\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
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document.write( "which simplifies to:<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=37.06+=+cross%280.085%29%2Fcross%280.085%29%2AS ALIGN=MIDDLE  ALT=\"37.06+=+cross%280.085%29%2Fcross%280.085%29%2AS\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
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document.write( "so <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=S+=+37.06 ALIGN=MIDDLE  ALT=\"S+=+37.06\"   DISABLED_style= \"max-width:90%; height:auto;\" > and this rounds to $37.00.  Answer D is the selection.<BR>\n" );
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document.write( "Hope this helps you to understand the problem a little better. </SPAN>\n" );
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