1. Compute the required rate of return (yield or Kp) on preferred stock based on the following information. Preferred Technology has preferred stock outstanding that pays a $14.20 annual dividend. It has a price of $139. Input your answer as a percent rounded to 2 decimal places.
2. Suppose the federal government allowed you to invest a portion of your payroll taxes in a personal retirement account. Assume that you could earn a higher rate of return on that money than you could have through Social Security. How would you expect that higher rate of return to affect the timing of your retirement?