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To determine the price of preferred stock:

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To determine the price of preferred stock:

 Options:

A. divide the rate of return by the dividend amount
B. divide the dividend amount by the rate of return
C. divide the dividend amount by the rate of return minus the growth rate
D. divide the dividend amount by the growth rate

 

The Correct Answer Is:

  • B. divide the dividend amount by the rate of return

 

Conclusion

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