Which of the Following Formulas Is Appropriate to Find the Value

question 72

Multiple Choice

Which of the following formulas is appropriate to find the value of preference share with a fixed dividend?

• A)Value of preference share = Annual Preference share Dividend (1 + growth rate)/Market's Required Return on Preference share
• B)Value of preference share = Annual Preference share Dividend (1 + growth rate)/Market's Required Return on Preference share - growth rate
• C)Value of preference share = Annual Preference share Dividend/Market's Required Return on Preference share
• D)Value of preference share = Annual Preference share Dividend/Investor's Required Return on Preference share

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Definitions:

Price Level

The mean value of current prices across all types of goods and services generated within the economy.

Approximate Price

An estimated cost of a product or service, which may not be the final price due to various influencing factors.

Demand-Oriented

A pricing strategy that sets prices based on the customer's perceived value of the product or service, rather than the seller's cost.

Approximate Price

An estimated cost given to consumers for a product or service, not necessarily the final price.