The preferred shares of Chinook Electrical Co. have a par value of $100 and a dividend rate

Question:

The preferred shares of Chinook Electrical Co. have a of $100 and a rate of 8 percent. The current price is $110. If the risk-free rate is 2 percent, what is the risk premium associated with these preferred shares?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...