Explanation:
Calculation:
$50 × 5% = $2.50$2.50 / $48 = 0.05208 = 5.208%This rounds to 5.2%, which matches option C.
An analyst gathers the following information about a company's non-callable, fixed-rate perpetual preferred stock:
$50$48The capitalization rate of the stock is closest to:
A
4.8%.
B
5.0%.
C
5.2%.
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