1 answer

A share of preferred stock is paying an annual dividend of $5. What is the price...

Question:

A share of preferred stock is paying an annual dividend of $5. What is the price of the preferred stock if the required rate of return is 11%?

Select one: A. $66.67 B. $45.45 C. $41.67 D. $35.71


Answers

Formula

D . Dividend Required rate of return

The price of the preferred stock must be:

Stock price =

Stock price = 45.45

The correct option is B.

.

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