Suppose a preferred share pays perpetual QUARTERLY dividends of $0.25 and has a per annum dividend yield of 6 percent. What is the fair value of this preferred share?

A) $14.67
B) $15.33
C) $16.00
D) $16.67

D
Explanation: D) PV = PMT/r = $.25/0.015 = $16.67.

Business

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