The Current Market Value of the 500,000 Preferred Shares of Clumsy

question 16

Multiple Choice

The current market value of the 500,000 preferred shares of Clumsy Sports Inc.is $25 million.If the shares pay a quarterly dividend of $1.25 on a par value of $85 and the risk premium is 4.5 percent,what is the implied risk-free rate?

• A) 4.00%
• B) 4.50%
• C) 5.00%
• D) 5.50%

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