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9-6 PREFERRED STOCK VALUATION Fee Founders has perpetual preferred stock outstanding that sells for $60 a share and pays a dividend of $5 at the end of each year. What is the required rate of return

Respuesta :

Answer:

Required rate of return = 8.33% Approx.

Explanation:

Given:

Preferred stock outstanding = $60

Dividend = $5

Find:

Required rate of return

Computation:

Required rate of return = [D / P]100

Required rate of return = [5/60]100

Required rate of return = 8.33% Approx.

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