Your firm has preferred stock outstanding that pays a current dividend of $2.00 per year and has a current price of $21.50. Currently, preferred stock makes up approximately 15% of your firm's long-term financing
What is the market required rate of return on your firm's preferred stock?
A) 8.70%
B) 9.00%
C) 9.30%
D) 15.00%
Answer: C
Explanation: C) Rps = = = 9.30%.
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