An Issue of Preferred Stock Is Paying an Annual Dividend

question 14

Multiple Choice

An issue of preferred stock is paying an annual dividend of $1.50. The growth rate for the firm's common stock is 5%. What is the preferred stock price if the required rate of return is 7%?

• A) $21.43
• B) $30.00
• C) $22.50
• D) None of these options are correct

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Definitions:

Cooperativeness

The willingness to work together with others towards a common goal or to be helpful.

Assertiveness

A communication and behavior style characterized by confidently expressing one's thoughts, feelings, and beliefs in a way that respects the rights of others.

Conflict Management

The practice of identifying and handling conflicts in a sensible, fair, and efficient manner.

Superordinate Goal

A shared objective that requires the cooperation of two or more individuals or groups to achieve, often used to resolve conflicts.