alleryStart learning →A perpetual 9% preference share of Rs 100 face value is valued at a 12% required return. Its value is?
ARs 108
BRs 100
CRs 90
DRs 75
Answer & Solution
Correct answer: D. Rs 75
A fixed dividend of Rs 9 forever is a perpetuity, so value is 9 / 0.12 which equals Rs 75.
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