An 8% ksh 30,000,000 pref. stock will pay the annual dividend into perpetuity. An investor with a required rate of return of 12% has just paid ksh 23,000,000 to buy this preference stock.

Select one:

A. He has just made a loss of ksh 3,000,000

B. He has just made a profit of ksh 3,000,000

C. He has just made a profit of ksh 7,000,000

D. He has just made a loss of ksh 7,000,000