What Dividend Is Paid on Preferred Stock If Investors Require

question 53

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 per share and a book value of $50 per share?

• A) $2.92
• B) $4.50
• C) $4.68
• D) $4.86

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Definitions:

Low Investment

A scenario characterized by minimal input of capital or resources towards business growth, expansion, or development activities.

Low Productivity

A situation where there is an inefficient use of resources, resulting in less output per unit of input, often affecting economic growth and competitiveness.

Adequate Infrastructure

Essential facilities and systems serving a country, city, or area, including transportation and communication systems, power plants, and schools, that are sufficient to support economic activities and improve quality of life.

Public Sector

The sector of an economy that is controlled or operated by the government, including services such as education, policing, and healthcare.