Question

A preferred stock has a dividend of $6.50. The required rate of return is 12.00%.   What...

A preferred stock has a dividend of $6.50. The required rate of return is 12.00%.   What is the price of the preferred stock?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans $ 54.17

The price of the preferred stock = Dividend / required rate of return

                                              = 6.50 / 12.00%

                                              = $ 54.17

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Pepsi has issued a preferred stock which has 14% required rate of return. If the stock...
Pepsi has issued a preferred stock which has 14% required rate of return. If the stock price is 57$, what is the amount of the annual dividend payments?
A preferred stock pays a constant dividend of $2.43. The required rate of return is 12.3%....
A preferred stock pays a constant dividend of $2.43. The required rate of return is 12.3%. Calculate its price.
Dividend one $12.00 Dividend 2 5.00 Dividend 3 7.00 Dividend 4 3.00 Dividend growth rate 4%...
Dividend one $12.00 Dividend 2 5.00 Dividend 3 7.00 Dividend 4 3.00 Dividend growth rate 4% Required return 15% Afterwards the company anticipates paying a constant 4%. If the required return on the stock is 15%, what is the current share price? Year 4 price Share price
1. What is the price of a share of preferred stock that has a dividend of...
1. What is the price of a share of preferred stock that has a dividend of $3 if the cost of preferred (rp) is 15% 2. What would you pay for a share of common stock if you expect the next dividend to be $3 and you expect to sell it in one year for $25, assuming the cost of equity (re) is 15%. 3. MBV is a cruise line which announced that dividends are expected to grow by 3.5...
Preferred Products has issued preferred stock with an annual dividend of $5.60 that will be paid...
Preferred Products has issued preferred stock with an annual dividend of $5.60 that will be paid in perpetuity.a. If the discount rate is 10.00%, at what price should the preferred sell? (Round your answer to 2 decimal places.) b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) c. What is the dividend yield, the capital gains yield, and the expected rate of return of the stock? (Enter your answers as...
If the required rate of return is higher than the dividend rate of a preferred share,...
If the required rate of return is higher than the dividend rate of a preferred share, the par value is _______________ the current market value of the preferred share. equal to less than higher than independent of
AAA firm’s required return = 12.00%, the price of the stock = $40 per share. D0...
AAA firm’s required return = 12.00%, the price of the stock = $40 per share. D0 = $1. Dividend will grow by 30% for the next four years. After the fourth year, the dividend will grow at the rate of g forever. Find g. (hint: D4 = $1.00(1.30)4. a.   5.17% b.   6.34% c.   5.72% d.   6.02%
Question 20 How is preferred stock affected by a decrease in the required rate of return?...
Question 20 How is preferred stock affected by a decrease in the required rate of return? The dividend increases. The dividend yield increases. The value of a share of preferred stock increases. The dividend decreases. Question 23 Beta measures diversifiable risk. standard deviation total risk. systematic risk. please answer both questions. thank you
The risk-free rate is 5%, beta is 1.18, the expected dividend is 6.50, the expected return...
The risk-free rate is 5%, beta is 1.18, the expected dividend is 6.50, the expected return on the market is 18.7%, the growth rate is 5.73%, the current price is 19.76. Based on the result decided whether you are going to buy, sell, or hold stock. If you are going to sell or buy stock at what price are you going to do so?
A stock just paid a dividend of $1.20 The required rate of return is 10.1% and...
A stock just paid a dividend of $1.20 The required rate of return is 10.1% and the constant growth rate is 4.0% What is the current stock price?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT