CMT,IncHas an Issue of Preferred Stock Whose Par Value Is

question 23

Multiple Choice

CMT,Inc.has an issue of preferred stock whose par value is $500.The preferred stock pays a 4.5% dividend.If investors require a 5.5% rate of return for these shares,what price should the preferred stock sell for?

• A) $611.11
• B) $508.33
• C) $409.09
• D) $81.82

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