What Is the Value of a Preferred Stock That Pays

question 108

Multiple Choice

What is the value of a preferred stock that pays a $5.55 dividend to an investor with a required rate of return of 10%?

• A) $22.22
• B) $27.83
• C) $45
• D) $55.50

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Definitions:

Comply

To act according to a request, command, or a set of rules.

Deindividuation

A psychological state where an individual in a group loses self-awareness and feels less responsible for their actions, often leading to uninhibited behavior.

Anonymous

Describes actions or statements made without revealing one's identity.

Social Facilitation

The phenomenon where an individual's performance improves because they are in presence of others.