What Dividend Is Paid on Preferred Stock If Investors Require

question 52

Multiple Choice

What dividend is paid on preferred stock if investors require a 9% rate of return and the stock has a market value of $54.00 per share and a book value of $50.00 per share?

• A)$2.92
• B)$4.50
• C)$4.68
• D)$4.86 9% = Dividend/Price

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Definitions:

Complete Contract

A contract that outlines all the relevant and necessary conditions and terms of the agreement between parties for a particular transaction or arrangement.

Privity

Privity refers to a close, direct, or successive relationship between two parties, especially one recognized by law, such as between lessor and lessee or between buyer and seller.

Tangible Stake

A concrete or physical interest, investment, or asset in a project or outcome.

Unfair

An action or situation marked by injustice, partiality, or deception, often violating ethical standards.