HLPRB) pays $4.40 in annual dividends. If the required return on the preferred s

Question

HLPRB) pays $4.40 in annual dividends. If the required return on the preferred stock is 7.40 percent, what is the value of the stock? (Round your answer to 2 decimal places.) HLPRB) pays $4.40 in annual dividends. If the required return on the preferred stock is 7.40 percent, what is the value of the stock? (Round your answer to 2 decimal places.) HLPRB) pays $4.40 in annual dividends. If the required return on the preferred stock is 7.40 percent, what is the value of the stock? (Round your answer to 2 decimal places.)

Explanation / Answer

Using constant growth model:

P0= D0(1+g)/(i-g)

In case of preferred stock , growth rate is zero

P0=$4.40/(.074-0)

=$59.46

Value of stock=$59.46

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.