Consider a perpetual preferred share paying a fixed dividend. What will happen to the market value of the share if the dividend yield rate decreases? The market value will decrease. The market value will increase. The market value will remain the same.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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Chapter7: Common Stock: Characteristics, Valuation, And Issuance
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Consider a perpetual preferred share paying a fixed dividend.
What will happen to the market value of the share if the dividend yield rate
decreases?
The market value will decrease.
CThe market value will increase.
O The market value will remain the same.
Transcribed Image Text:Consider a perpetual preferred share paying a fixed dividend. What will happen to the market value of the share if the dividend yield rate decreases? The market value will decrease. CThe market value will increase. O The market value will remain the same.
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