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XYZ company has preferred stock that has an annual dividend of $5.If the current market price of a preference share is $30. What is the cost of preference share

Answer»

Answer:

Preferred Share ANNUAL DIVIDEND Formula

To FIND the annual dividend, multiply the par VALUE by the dividend rate. For EXAMPLE, if thepreferred shares have a par value of $50 and adividend rate of 6 percent, multiply $50 by 0.06 to find that the preferred share pays a $3annual dividend.



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