What is the required rate of return on preferred share

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Reference no: EM131580193

ABC Canada pays a $2.50 dividend on its preferred shares. If the price of its preferred shares is $48 and floatation costs would be 5% per share, what is the required rate of return on ABC’s preferred shares?

a. 4.08% b. 5.48% c. 6.00% d. 3.00%

Reference no: EM131580193

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