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What is the implied risk premium

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Question 1: The current market value of the 500,000 preferred shares of Clumsy Sports Inc. is $25 million. If the shares pay an annual dividend of $5 on a par value of $85 and the risk-free rate is 5.5%, what is the implied risk premium?

Option 1: 5.00%
Option 2: 4.50%
Option 3: 4.00%
Option 4: 5.50%

Reference no: EM132826536

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