What dividend yield must xyz offer

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XYZ Corp is planning to offer a special series of preferred shares. XYZ will set the dividend yield on these preferred shares so that they equal the return on its common shares. The risk-free rate in this economy is 4%, XYZ's Beta is 1.2 and the market risk premium is 2%. Also, the par value of the preferred stock is $2. What dividend yield must XYZ offer? Hint: the dividend yield will not be a number/constant.

Reference no: EM132955732

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