A share of preferred stock pays a $2 annual dividend,but pays the dividend in four equal quarterly installments.Investors seek a 12% annual percentage return on the investment.What price should the preferred stock trade?

Name: A share of preferred stock pays a $2 annual dividend,but pays the dividend in four equal quarterly installments.Investors seek a 12% annual percentage return on the investment.What price should the preferred stock trade?
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Question

Quizplus · Accepted Answer

=$0.50/3%

A Share of Preferred Stock Pays a $2 Annual Dividend,but