Question

Timeless Corporation issued preferred stock with a par value of $900. The stock promised to pay...

Timeless Corporation issued preferred stock with a par value of $900. The stock promised to pay an annual dividend equal to 12.0% of the par value. If the appropriate discount rate for this stock is 15.0%, what is the value of the stock? Question 16 options:

$954.90

$1,125.00

$720.00

$591.12

$607.68

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Answer #1

Ans $ 720.00

the value of the stock = Dividend / Discount rate

                                 = (900 * 12%) / 15%

                                  = $ 720.00

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