QUESTIONS 79 THROUGH 90 RELATE TO EQUITY INVESTMENTS

89. - MOCK AND SAMPLE EXAMS CFA CFA LEVEL I MOCK EXAM AFTERNOON 2013
MOCK AND SAMPLE EXAMS CFA CFA LEVEL I MOCK EXAM AFTERNOON 2013
89. A company has issued non-callable, non-convertible preferred stock with the following features:  Par value per share $10  Annual dividend per share $2  Maturity 15 years If an investor’s required rate of return is 8% and the current market price per share of the preferred stock is $25, the most likely conclusion is that the preferred stock is: A. overvalued by $4.73. B. fairly valued at $25.00. C. undervalued by $15.00.