Sav Homework Chapter 8 Graded Homework Score 0 of 1 pt 7 of

Sav Homework: Chapter 8 Graded Homework Score: 0 of 1 pt 7 of 18 (0 complete) ? | HW Score: 0%, 0 of 18 Problem 8.LO2.6 (similar to) Question Help If preferred stock sold for $76 a share and $2.52 dividends were paid annually, what would be the required rate of return? The required rate of return would be %. (Round to two decimal places.)

Solution

1)Required return=dividend/share price
=2.52/76=3.32%
2)Return=(final+dividend-initial)/initial
11%=(44+1.75-x)/x
x=41.22
3)Return=(final+dividend-initial)/initial
11%=(22+0.89+0.89-x)/x
X=21.42