World Wide Interlink Corp

question 3

Multiple Choice

World Wide Interlink Corp. has decided to undertake a large project. Consequently, there is a need for additional funds. The financial manager plans to issue preferred stock with an annual dividend of $5 per share. The stock will have a par value of $30. If investors' required rate of return on this investment is currently 20%, what should the preferred stock's market value be?

• A) $10
• B) $15
• C) $20
• D) $25