Question

A company issues 500,000 shares of preferred stock for $30 a share. The stock has a fixed annual dividend rate of 5% and a par value of $9 per share. The current price of the preferred stock is $32 a share. If sufficient dividends are declared, preferred stockholders can anticipate receiving annual dividends of:

A) $0.45 per share.

B) $1.50 per share.

C) $1.60 per share.

D) $1.05 per share.

Answer

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