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Farley Inc. has perpetual preferred stock outstanding that sells for $34 a share and pays a...

Farley Inc. has perpetual preferred stock outstanding that sells for $34 a share and pays a dividend of $2.75 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

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Answer #1

Ans 8.09%

Required Rate of Return = Dividend / Price of Share * 100

                                    = 2.75 / 34 * 100

                                     = 8.09%

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