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Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. What is the stock's value
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Earley Corporation issued perpetual preferred stock with an 8% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. What is the stock's value

User Yury Fedorov
by
6.4k points

1 Answer

2 votes

Answer:

$114.29

Step-by-step explanation:

Calculation to determine the stock's value

Using this formula

Stock's value=Annual Dividend /Yield or Rate of return

Let plug in the formula

Stock's value=$8/7%

Stock's value=$114.29

Therefore the stock's valuewill be $114.29

User Mgalloy
by
5.6k points
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