A share of preferred stock pays dividends at a, Ask an Expert

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A share of preferred stock pays dividends at a predetermined rate, and so can be thought of as a bond that pays coupons forever and has no redemption value. Suppose that such a share of stock pays semiannual dividends that increase by 1.8 percent with each dividend, and the first dividend is 8 dollars. If the price of the stock is 109 dollars, what is the yield rate? (Give your answer as the nominal rate convertible semiannually.)

Answer = percent. (3 decimal place)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92744359

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