Register
How much would you pay for a share of preferred stock that pays a $3.75 dividend and your required return is 5.25%
29.7k views
3 votes
How much would you pay for a share of preferred stock that pays a $3.75 dividend and your required return is 5.25%

User Kevinmm
by
4.6k points

1 Answer

6 votes

Answer:

$71.43 per share

Step-by-step explanation:

Price to pay (Present value) = Annual Dividend / Required return

Price to pay (Present value) = $3.75 / 0.0525

Price to pay (Present value) = 71.42857142857143

Price to pay (Present value) = $71.43 per share

User Sean Stopnik
by
5.7k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.7m questions

7.5m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!