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Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.10 dividend every...

Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.10 dividend every year, in perpetuity. If this issue currently sells for $80.15 per share, what is the required return?
Round to 2 decimal places
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Answer #1

Required rate of return=Annual dividend/Current value

=5.10/80.15

which is equal to

=6.36%(Approx).

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