E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay...

Question

Question

E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the f

Answer 1

Answer #1

Price in 19 years = D₂₀ / R

Price in 19 years = $20 / 0.0775

Price in 19 years = $258.06

Current stock price = $258.06 / 1.0775¹⁹

Current stock price = $62.49

Answer 2

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