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Shiny Industries producers of crab meat can issue perpetual preferred stock at a price of $37.79...

Shiny Industries producers of crab meat can issue perpetual preferred stock at a price of $37.79 per share. The stock would pay a constant annual dividend of $6.25 per share. What is the company's return on preferred stock (r)?

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Answer #1

Ans 16.54%

The company's return on preferred stock (r) is 16.54%

Return on Preferred Stock = Dividend / Price* 100

                                       = 6.25 / 37.79 * 100

                                       = 16.54%

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