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You are considering buying preferred stock from Bank of America, which is currently trading at $80. You see from their dividend history that their preferred

You are considering buying preferred stock from Bank of America, which is currently trading at $80. You see from their dividend history that their preferred shares have paid a dividend of $0.40 per share every 6 months for the last 5 years. Given this information, and assuming markets are efficient, what is the required rate of return for preferred stock?

10%

1%

5%

20%

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