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Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $8.50 per share. If the required return on this preferred stock is 6.5%, then at what price should the stock
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Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $8.50 per share. If the required return on this preferred stock is 6.5%, then at what price should the stock sell

User Walter Chang
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2 Answers

5 votes

the stock price is : $130.77

Hope this helps! good luck :)

User Taapo
by
4.7k points
2 votes

Answer:

$130.77

Step-by-step explanation:

Price of preferred stock = Annual dividend / Required return

Price of preferred stock = $8.50/0.065

Price of preferred stock = $130.7692307692308

Price of preferred stock = $130.77

User Pater
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