A preferred stock from Duquesne Light Company (DQUPRA) pays $230 in annual dividends.

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Question

A preferred stock from Duquesne Light Company (DQUPRA) pays $230 in annual dividends.

If the required return on the preferred stock is 5.20 percent, what's the value of the stock?

business finance

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Answer 1

Answer #1

Dividend = $2.30

Cost of preferred stock = 5.20%

Valur of preferred stock = dividend/cost of preferred stock

= 2.30 / 0.0520

= $44.23

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Answer 2

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​A preferred stock from Duquesne Light Company (DQUPRA) pays $230 in annual dividends.

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