(Preferred stock valuation) What is the value of a preferred stock when the dividend rate is...

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(Preferred stock valuation) What is the value of a preferred stock when the dividend rate is 13 percent on a $100 par value?

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Answer 1

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Answer #1

rate positively ..

Computatin of value of preferred stock
value of preferred stock = Annual dividend/required rate

annual dividend = 100*13%	13
required rate =	10%

Therefore value of preferred stock =13/10%	130.00
ans =		130.00

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Answer 2

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