Question

A preferred stock from ABC pays $3.55 in annual dividends. If the required return on the preferred stock is 6.7%, what is the value of the stock?

Answer 1

The value of the stock is $52.99 or $53.

Explanation:

Annual dividend per share

Cost of preferred stock

=

$

3.55

6.7

%

=

$

52.99

hope this helps :)