Your Firm Has Preferred Stock Outstanding That Pays a Current

question 57

Multiple Choice

Your firm has preferred stock outstanding that pays a current dividend of $3.00 per year and has a current price of $35.90.You anticipate that the economy will grow steadily at a rate of 2.00% per year for the foreseeable future.What is the market required rate of return on your firm's preferred stock?

• A)10.82%
• B)8.36%
• C)7.59%
• D)There is not enough information to answer this question.

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