Kendra Corporation's preferred shares are trading for $26 in the market and pay a $4.10 annual...
Kendra Corporation's preferred shares are trading for $26 in the market and pay a $4.10 annual dividend. Assume that the market's required yield is 15 percent a. What is the stock's value to you, the investor? b. Should you purchase the stock? a. The value of the stock to you, the investor, is $-per share.
Homework Answers
a. The Value of Stock =Dividend/Required =4.10/15% =27.33
b. Yes the stock should be purchased because value of stock is
lower than current price of stock.
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