Answered

Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Get immediate and reliable solutions to your questions from a community of experienced experts on our Q&A platform. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

ABC Corporation, has an issue of preferred stock outstanding that pays a $2.50 dividend every year in perpetuity. This stock issue currently sells for $75 per share. What is the required return for this preferred stock?

Sagot :

Answer:

the required return on the preferred stock is 3.33%

Explanation:

The computation of the required return on the preferred stock is shown below:

= Dividend ÷ Selling price per share

= $2.50 ÷ $75

= 3.33%

Hence, the required return on the preferred stock is 3.33%

We simply applied the above formula

Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.