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Answer to Question #250894 in Economics for fentaye
Question #250894
Fee Founders has preferred stock outstanding that pays a
dividend of $5 at the end of each year. The preferred stock sells for $60 a share. What is
the preferred stock’s required rate of return?
Expert's answer
The preferred stock’s required rate of return is: 5/60 = 0.083 or 8.3%.
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