Bullish, Inc. has an issue of preferred stock outstanding that pays a $ 8.00 dividend every year, in perpetuity. If this issue currently sells for $ 98.00 per share, what is the required return

The required return is 8.16%

Explanation:

The computation of the required return is shown below:

The Required rate of return on preferred stock is

= Dividend per share ÷ Share price

= $8.00 ÷ $98.00

= 8.16%

By dividing the dividend per share from the share price we can get the required return and the same is to be considered

Hence, the required return is 8.16%

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"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"