Preferred dividend is divided for required rate of return to calculate

The correct answer is: C. value of preferred stock.

Preferred stock is a type of stock that has a fixed dividend that is paid out before any dividends are paid to common stockholders. The required rate of return is the minimum rate of return that an investor expects to earn on an investment. To calculate the value of preferred stock, you divide the preferred dividend by the required rate of return.

Here is a brief explanation of each option:

• A. value of number of shares: This is not the correct answer because the preferred dividend is divided by the required rate of return, not the number of shares.
• B. value of equity: This is not the correct answer because equity is the total value of a company’s assets minus its liabilities. Preferred stock is a type of equity, but it is not the only type.
• D. value of common stock: This is not the correct answer because the preferred dividend is divided by the required rate of return, not the value of common stock.