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Ryyrel

Business Finance

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Universal Export’s preferred shares pay a 6.5% annual dividend on a $50-par value. The next dividend is due in 1 year. The required return of preferred shareholders is 9%. What is the fair price for the preferred shares?

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$50*(9-6.5)/100

=50*2.5/100

=50-1.25

=48.75 ans

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