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Acme Class B Preferred Shares Pay Quarterly Dividends of $2

Question 168

Multiple Choice

Acme class B preferred shares pay quarterly dividends of $2.50. The shares must be redeemed at $100 by Acme 10 years from now when the last dividend is paid. At what price should the shares trade today if the rate of return required by the market on similar preferred shares is 12% compounded quarterly?


A) $57.79
B) $60.00
C) $88.44
D) $20.83
E) $83.33

Correct Answer:

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