A preferred stock will be worth ______________ today if it is expected to pay a fixed...
A preferred stock will be worth ______________ today if it is expected to pay a fixed amount of $6 dividend per share every year, and investors require a return of 7% on this preferred stock.
Multiple Choice
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$114.29
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$33.50
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$65.50
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$85.71
Homework Answers
Present value of preferred stock = Dividend / rate of return
Present value of preferred stock = 6 / 0.07
Present value of preferred stock = $85.71
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