Donna, a chartered financial analyst (CFA) wants to advise her client about investment in preference shares. The client needs to invest in either Queens Plc. or Royal Plc.’s preferred shares. Queens and Royal Plcs. are expected to pay preferred dividends of $5 and $7 per share, respectively. The current market price for the two companies is $26 and $65 for Queens and Royal Plcs., respectively. Advise Donna on the better investment if the client’s required rate of return of 14 percent.

Answer rating: 100% (QA)

Based on the information provided the better investment for Donna s ... View the full answer