CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

A share of preferred stock pays a specific dividend on a specific schedule for as long as the issuing company exists. Assume that a share of preferred stock pays an annual per-share dividend of $6.75 at the end of each year. The present value of this share of preferred stock is $75.62. Assume that the company paying the dividends will exist forever. What interest rate or rate of return does this dividend and price represent?
A. 11.20%
B. 9.75%
C. 8.92%
Explanation: r = A/PV

User Contributed Comments 1

User Comment
mc25456 r=6.75/75.62
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