Lane Fast Food Corp

Finance Aug 05, 2020

Lane Fast Food Corp.,has an issue of preferred stock outstanding that pays a $4.15 dividend every year in perpetuity. If this issue currently sells for $95 per share, what is the required return?

Expert Solution

Computation of the required return:-

Required return = Annual dividend / Current share price

= $4.15 / $95

= 4.37%

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote