What is the required rate of return on a preferred stock with a $50 par value, a stated annual dividend of 7 of par, and a current market price of (a) $30, (b) $40, (c) $50, (d) $70 (Assume the market is in equilibrium with the required return equal to the expected return) ...

What is the required rate of return on a preferred stock with a $50 par value, a

Question:

What is the required rate of return on a preferred stock with a $50 par value, a stated annual of 7% of par, and a current market price of?
(a) $30,
(b) $40,
(c) $50,
(d) $70
(Assume the market is in equilibrium with the required return equal to the expected return)?
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...