Question

A preferred stock from Hecla Mining Co. (HLPRB) pays $3.10 in annual dividends. If the required return on the preferred stock is 6.10 percent, what is the value of the stock? (Round your answer to 2 decimal places.)

Answer 1

$50.82

Step-by-step explanation:

Hecla mining corporation pays an annual dividend of $3.10

The required return on the preferred stock is 6.10 percent

Therefore the value of the stock can be calculated as follows

= Annual dividend/ required rate of return

= 3.10 / 6.10÷100

= 3.10/ 0.061

= $50.82

Hence the value of the stock is $50.82