A Preferred Stock Pays an Annual Dividend of $2

question 120

Multiple Choice

A preferred stock pays an annual dividend of $2.95.What is one share of this stock worth to you today if you require a rate of return of 8.2 percent?

• A)$ 51.21
• B)$ 33.03
• C)$ 38.00
• D)$ 35.98
• E)$ 33.49

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Definitions:

Categorical

Absolute and unconditional; pertaining to statements or propositions that express a simple assertion without conditions.

Generalization

A broad statement or concept obtained by inference from specific cases.

Particular Case

A specific instance or example of a general rule or situation.

Pure Hypothetical

A conditional statement or proposition that is entirely based on speculation rather than factual evidence.