Preferred Stock: Each Quarter, Transam, Inc

question 19

Multiple Choice

Preferred stock: Each quarter, Transam, Inc., pays a dividend on its perpetual preferred stock. Today, the stock is selling at $83.45. If the required rate of return for such stocks is 10.5 percent, what is the quarterly dividend paid by this firm?

• A) $8.76
• B) $10.50
• C) $2.19
• D) $2.63

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