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ABC Canada pays a $2.50 dividend on its preferred shares. If the price of its preferred shares is $48 and floatation costs would be 5%

ABC Canada pays a $2.50 dividend on its preferred shares. If the price of its preferred shares is $48 and floatation costs would be 5% per share, what is the required rate of return on ABCs preferred shares?

a. 4.08% b. 5.48% c. 6.00% d. 3.00%

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