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

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans $ 720.00

the value of the stock = Dividend / Discount rate

                                 = (900 * 12%) / 15%

                                  = $ 720.00

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
Allison Corp. has just issued nonconvertible preferred stock​ (cumulative) with a par value of​ $20 and...
Allison Corp. has just issued nonconvertible preferred stock​ (cumulative) with a par value of​ $20 and an annual dividend rate of​ 4.25%. The preferred stock is currently selling for​ $18.75 per share. What is the annual yield or return​ (r) on this preferred​ stock?
(a) Company A has issued perpetual preferred stock with a par value of $100. The stock...
(a) Company A has issued perpetual preferred stock with a par value of $100. The stock pays an annual dividend of $6 and its current price is $60. (i) What is the dividend yield of Company A’s preferred stock? (ii) What is the total return of holding Company A’s preferred stock for year 1?   (b) Company B has just paid a dividend of $2.45 per share. The company will increase its dividend by 20% next year and then reduce its...
In 2018, Libra Sdn Bhd issued a RM100 par value preferred stock which pays a 7...
In 2018, Libra Sdn Bhd issued a RM100 par value preferred stock which pays a 7 percent annual dividend. The company requires a 5 percent rate of return. What price would you be willing to pay for a share of the preferred stock if you receive your first dividend one year from now? If the current market is selling this preferred stock at RM12.50, will you buy? Explain your decision.please write elaborately
1. The preferred stock of Gandt Corporation pays a $ 1.75 dividend. What is the value...
1. The preferred stock of Gandt Corporation pays a $ 1.75 dividend. What is the value of the stock if your required return is 12 percent? The value of the preferred stock is-----per share.  ​(Round to the nearest​ cent.) 2. ​(Preferred stock valuation​) What is the value of a preferred stock when the dividend rate is 12 percent on a $ 100 par​ value? The appropriate discount rate for a stock of this risk level is 15 percent.The value of...
PREFERRED STOCK VALUATION Earley Corporation issued perpetual preferred stock with a 11% annual dividend. The stock...
PREFERRED STOCK VALUATION Earley Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 10%, and its par value is $100. What is the stock's value? Round your answer to two decimal places. $ Suppose interest rates rise and pull the preferred stock's yield up to 11%. What is its new market value? Round your answer to two decimal places. $
Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 10%,...
Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 10%, and its par value is $100. Round your answers to the nearest cent. What is the stock's value? $    Suppose interest rates rise and pull the preferred stock's yield up to 12%. What is its new market value? $  
having the following information:- A $100.0 par value preferred stock with 10.0% dividend & a 15.0%...
having the following information:- A $100.0 par value preferred stock with 10.0% dividend & a 15.0% required return. A $1.0 par value common stock with $3.0 EPS; a 5.0% risk-free rate; a 6.0% Market Risk-Premium; a 40.0% pay-out ratio; a 5.0% constant growth in EPS & dividend per share (g). A 20 years 6.0% coupon debenture (Non-guaranteed corporate bond) with a Yield-to-maturity (YTM) of 5.0%. Answer the following questions:- 1 - The preferred stock's price is ??? 2 - The...
Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 9%,...
Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 9%, and its par value is $100. What is the stock's value? Round your answer to two decimal places. $ Suppose interest rates rise and pull the preferred stock's yield up to 15%. What is its new market value? Round your answer to two decimal places. $
A corporation issued 3,000 shares of $10 par value common stock for $36,000 cash. A corporation...
A corporation issued 3,000 shares of $10 par value common stock for $36,000 cash. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,500. The stock has a $3 per share stated value. A corporation issued 1,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,500. The stock has no stated value. A corporation issued 750 shares of $75...
what is the value of a preferred stock that has a par value of 100, a...
what is the value of a preferred stock that has a par value of 100, a required rate of return of 11% and pays a 7 percent annual dividend
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT