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Let's work through each question one by one.

### 1. **Price of the Preferred Stock**
- **Given**:  
  Par Value = $100  
  Annual Dividend = 6% of Par Value = 0.06 × 100 = $6  
  Required Return = 8%

- **Formula**:  
  The price of a preferred stock is given by the formula:  
  \[
  \text{Price} = \frac{\text{Annual Dividend}}{\text{Required Return}}
  \]
  Substituting the values:  
  \[
  \text{Price} = \frac{6}{0.08} = 75
  \]

  **Answer**: The price of the preferred stock is **$75**.

---

### 2. **Present Value of Cash Flows**
- **Given**:  
  Cash Flows: $50,000, $60,000, $70,000  
  Discount Rate = 8% (0.08)  
  Time periods: Year 1, Year 2, Year 3

- **Formula**:  
  The present value (PV) of cash flows is calculated using:  
  \[
  PV = \frac{\text{Cash Flow}_1}{(1 + r)^1} + \frac{\text{Cash Flow}_2}{(1 + r)^2} + \frac{\text{Cash Flow}_3}{(1 + r)^3}
  \]
  where $ r $ is the discount rate.

  Substituting the values:  
  \[
  PV = \frac{50,000}{(1 + 0.08)^1} + \frac{60,000}{(1 + 0.08)^2} + \frac{70,000}{(1 + 0.08)^3}
  \]

  Let's calculate each term:
  \[
  PV_1 = \frac{50,000}{1.08} = 46,296.30
  \]
  \[
  PV_2 = \frac{60,000}{1.08^2} = 51,440.33
  \]
  \[
  PV_3 = \frac{70,000}{1.08^3} = 55,566.08
  \]

  Summing them up:
  \[
  PV = 46,296.30 + 51,440.33 + 55,566.08 = 153,302.71
  \]

  **Answer**: The present value of the cash flows is **$153,302.71**.

---

### 3. **Expected Return on the Stock**
- **Given**:  
  Beta = 1.2  
  Risk-Free Rate = 4% (0.04)  
  Expected Market Return = 12% (0.12)

- **Formula**:  
  The expected return on a stock using the Capital Asset Pricing Model (CAPM) is:  
  \[
  \text{Expected Return} = \text{Risk-Free Rate} + \beta \times (\text{Market Return} - \text{Risk-Free Rate})
  \]
  Substituting the values:  
  \[
  \text{Expected Return} = 0.04 + 1.2 \times (0.12 - 0.04)
  \]
  \[
  \text{Expected Return} = 0.04 + 1.2 \times 0.08 = 0.04 + 0.096 = 0.136
  \]

  **Answer**: The expected return on the stock is **13.6%**.

---

Do you need any more details or further explanations?

### Related Questions:
1. How does the required return affect the price of a preferred stock?
2. What is the difference between discounting and compounding in time value of money problems?
3. How does a change in the discount rate influence the present value of future cash flows?
4. What are the implications of a high beta value for the expected return on a stock?
5. How does CAPM model risk and return for different stocks?

**Tip**: In finance, understanding the time value of money is crucial because it helps evaluate the worth of future cash flows in today's terms!

A preferred stock with a par value of $100 pays an annual dividend of 6%. If the required return is 8%, what is the price of the preferred stock?

A company is projected to have cash flows of $50,000, $60,000, and $70,000 over the next three years. If the discount rate is 8%, what is the present value of these cash flows?

A company has a beta of 1.2. If the risk-free rate is 4% and the expected market return is 12%, what is the expected return on the stock?

Solve questions on the price of a preferred stock with a par value of $100 and a 6% annual dividend, the present value of future cash flows with an 8% discount rate, and the expected return on a stock using CAPM with a beta of 1.2. Perfect for finance students.

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