Question

If the required return on 59 Achi's preferred stock is 8.3%, what is its price?


Achi Corp. has preferred stock with an annual dividend of $3.19. If the required return on 59 Achi's preferred stock is 8.3%, what is its price? (Hint For a preferred stock, the dividend growth rate is zero.) 


Achi's stock price will be $ _______ 

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Answer #1

Price of the preferred stock=Annual dividend/Required rate

Price of the preferred stock=3.19/8.3%

Price of the preferred stock=38.43

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