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.

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.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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.

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