Which of the following formulas is appropriate to find the value of preference shares with a fixed dividend?
A) Value of preference shares = Annual Preferred Shares Dividend (1+ growth rate) /Market's Required Yield on Preferred Shares
B) Value of preference shares = Annual Preferred Shares Dividend (1+ growth rate) /Market's Required Yield on Preferred Shares - growth rate
C) Value of preference shares = Annual Preferred Shares Dividend/Market's Required Yield on Preferred Shares
D) Value of preference shares = Annual Preferred Shares Dividend/Investor's Required Yield on Preferred Shares
Correct Answer:
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