The current market value of the 500,000 preferred shares of Clumsy Sports Inc.is $25 million.If the shares pay an annual dividend of $5 on a par value of $85 and the risk-free rate is 5.5 percent,what is the implied risk premium?
A) 4.00%
B) 4.50%
C) 5.00%
D) 5.50%
Correct Answer:
Verified
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