QUESTION 12 MECCS Inc.just issued some new preferred stock. The issue will pay an annual dividend...

Question

Question

QUESTION 12 MECCS Inc.just issued some new preferred stock. The issue will pay an annual dividend of $11.60 per share in perp

Answer 1

Answer #1

Option A

Horizon value of stock P9= Annual dividend/rate

= 11.6/6.27%

= 185

Current price = P9/(1+r)^n

= 185/1.0627^9

= 107.03

Answer 2

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