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You have received a share of preferred stock that pays an annual dividend of $10. Similar preferred stock issues are yielding 22.5%. What is the value of this share of preferred stock

Answer :

Tundexi

Answer:

The value of this share of preferred stock is $44.44

Explanation:

Dividend = $10

Yield= 22.5% = 0.225

Value of share of preferred stock = Dividend / Preferred stock yield

=$10/0.2250

=$44.44444

=$44.44

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