Your required rate of return on company XYZ's preferred stock is 12%.Their preferred stock pays a fixed annual dividend of $4.A share of XYZ preferred is valued at

Question

Quizplus · Accepted Answer

The value of the preferred stock can be calculated as follows:
Value of Preferred Stock = Annual Dividend / Required Rate of Return
Value of Preferred Stock = $4 / 0.12 = $33.33 (rounded to the nearest cent)
Therefore, the best choice is B, which is closest to $33.33.

Your Required Rate of Return on Company XYZ's Preferred Stock