Assume That You Would Like to Purchase 100 Shares of Preferred

Assume that you would like to purchase 100 shares of preferred stock that pays an annual dividend of $6 per share.However,you have limited resources now,so you cannot afford the purchase price.In fact,the best that you can do now is to invest your money in a bank account earning a simple interest rate of 6%,but where interest is compounded daily (assume 365 days) .Because the preferred stock is riskier,it has a required annual rate of return of 12% (assume that this rate will remain constant over the next 5 years) .For you to be able to purchase this stock at the end of 5 years,how much must you deposit in your bank account today,at t = 0?

A) $2,985.00
B) $4,291.23
C) $3,138.52
D) $3,704.18
E) $4,831.25