Ayden Inc has an issue of preferred stock outstanding that p

Ayden, Inc., has an issue of preferred stock outstanding that pays a dividend of $5.35 every year, in perpetuity. This issue currently sells for $93 per share. What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return

Solution

Required return = Annual dividend / Current Selling Price = $       5.35 / $          93 = 5.75%