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LTM, Inc. has an issue of preferred stock whose par value is $1,000. The preferred stock pays a 4.5% dividend. If investors required a 5.

LTM, Inc. has an issue of preferred stock whose par value is $1,000. The preferred stock pays a 4.5% dividend. If investors required a 5.5% rate of return for these shares, what price should the preferred stock sell for?

A. $611.11

B. $508.33

C. $409.09

D. $818.18

Top Answer

Value of preferred stock = Dividend/Required rate of return.... View the full answer

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Value of preferred stock = Dividend/Required rate of return.... View the full answer

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