11.1% Preference share of the DTX-Ltd with an issue price of $3 is currently selling at...

11.1% Preference share of the DTX-Ltd with an issue price of $3 is currently selling at $4.71 in the market. Find the cost of this DTX preference share.

[Round the answer to two decimal places. If your answer is 12.34%, write only 12.34, but do not write 0.1234]

Expert Solution

Cost of preferred share = Annual Dividend/Price

= 3*11.1%/4.71

= 7.07006%

i.e. 7.07%

Hence, the answer is 7.07

jeff jeffy answered 2 years ago

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