A stock pays a dividend of $5 at the end of each year, the preferred stock sells for $60 a share, What is the required rate of return?
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A stock pays a dividend of $5 at the end of each year, the preferred stock sells for $60 a share, What is the required rate of return?
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Vp = D/RP
$60=$5/rp
r hat p = 5/60
rp = 8.3%
Hi.. I think yr ans is correct..
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