Preferred dividend is Rs 50 and required rate of return is 2.5% then value of preferred stock would be
A. Rs 20.00
B. Rs 125.00
C. Rs 2,000.00
D. Rs 52.50
Answer: Option C
Solution (By Examveda Team)
Preferred stock = Preferred dividend / Required rate of return * 100= 50 / 2.5 * 100 = Rs. 2000.

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