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11Alexandr11 [23.1K]
2 years ago
9

Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers an annual return to investo

rs of 18.0%. The company wants the stock to sell for $743.00 per share. What annual dividend must the company offer?
a. $192.85.
b. $4,127.78.
c. $148.45.
d. $133.74.
e. $3,809.94.
Business
1 answer:
Musya8 [376]2 years ago
8 0

Answer: d. $133.74

Explanation:

The dividend paid to preferred shareholders is constant and based on the annual rate of return on the stock. If they plan to sell at a price of $743 per share, the dividend will be:

Dividend = Annual rate of return on stock * Price of stock

= 18% * 743

= $133.74

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