US Bank has a preferred stock that pays a dividend of $1.30. If you are willing...
US Bank has a preferred stock that pays a dividend of $1.30. If you are willing to purchase the stock at $20, what is your required rate of return? (Round your answer to the nearest .1% and assume that there are no transaction costs.
A. 6.5%
B. 7.8%
C. 6.7%
D. 9.1%
Homework Answers
Required rate of return=Annual dividend/Current value
=1.3/20
which is equal to
=6.5%
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