Alpha's Preferred Stock Currently Has a Market Price Equal to $80

question 53

Multiple Choice

Alpha's preferred stock currently has a market price equal to $80 per share.If the dividend paid on this stock is $6 per share, what is the required rate of return investors are demanding from Alpha's preferred stock?

• A)7.5%
• B)13.3%
• C)6.0%
• D)$6.00
• E)None of the above is a correct answer.

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Definitions:

Aquatic Life Zones

Ecological regions differentiated by water characteristics, including salinity, depth, and water flow, and inhabited by distinct groups of plant and animal life.

Terrestrial Biomes

Terrestrial biomes are large ecological zones on Earth's surface, with distinct climates and ecosystems, such as forests, deserts, and grasslands, characterized by the vegetation and animal life adapted to them.

Rocky Shore Zone

A coastal area where solid rock predominates, often featuring tide pools, and providing diverse habitats for marine life.

Anemones

Marine or freshwater polyps that belong to the phylum Cnidaria, characterized by their colorful appearance and a ring of tentacles surrounding a central mouth.