A preferred stock pays an annual dividend of $1.25. What is one share of this stock...

Question

Question

A preferred stock pays an annual dividend of $1.25. What is one share of this stock worth today if the rate of return is 13.5 percent? Show your work

business finance

Answer 1

Answer #1

Price of preferred stock = Dividend / Rate of Return

= $1.25/0.135

=$ 9.26

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Let me know if you have any doubt

Answer 2

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