IDNLearn.com makes it easy to find accurate answers to your questions. Our platform is designed to provide trustworthy and thorough answers to any questions you may have.
Sagot :
The required rate of return on its preferred stock is found by using PW = D/R.
Given Information
Dividend per year = $2
Stock price = $20
Tax rate = 21%
Required rate of return (R) = ?
- The formula for use to derive the Required rate of return includes PV = D/R, where PW means Present worth, D = Dividend per year and R means Required rate of return.
PV = D/R
$20 = $2 / R
$20 * R = $2
R = $2 / $20
R = 0.1
R = 10%
Therefore,, the required rate of return on the preferred stock is 10%.
In conclusion, the required rate of return on its preferred stock is found by using PW = D/R.
See similar solution here
brainly.com/question/17322679
We appreciate your contributions to this forum. Don't forget to check back for the latest answers. Keep asking, answering, and sharing useful information. IDNLearn.com provides the best answers to your questions. Thank you for visiting, and come back soon for more helpful information.