A company's preferred shares pay a $2 dividend every six months in perpetuity. What is the fair market value of the shares just after payment of a dividend if the dividend yield required by the market on shares of similar risk is
a) 4% compounded semi-annually?
b) 5% compounded semi-annually?

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The Answer of A company's preferred shares pay a $2 dividend every six months in perpetuity. What is the fair market value of the shares just after payment of a dividend if the dividend yield required by the market on shares of similar risk is
a) 4% compounded semi-annually?
b) 5% compounded semi-annually?

A Company's Preferred Shares Pay a $2 Dividend Every Six