Achi Corp. has preferred stock with an annual dividend of $3.22

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Achi Corp. has preferred stock with an annual dividend of $3.22

Achi Corp. has preferred stock with an annual dividend of $3.22. If the required return on Achi's preferred stock is 7.7%, what is its price? (Hint: For a preferred stock, the dividend growth rate is zero.)

Achi's stock price will be $ _______ . (Round to the nearest cent.)

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Answer 1

Answer #1

For preferred stock, price is calculated using the below formula (which is same for PV of perpetuity)

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Answer 2

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Achi Corp. has preferred stock with an annual dividend of $3.22

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Achi Corp, has preferred stock with an annual dividend of $3.19

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Achi Corp. has preferred stock with an annual dividend of $3.22

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