what is the value of a $100 par value preferred stock with a 4% coupon if investors require a 10% return?
Par value = $100
Interest = Par value * coupon rate
= $100 * 4%
= $4
Value of preferred stock = Interest / required rate of
return
=$4 / 10%
= $40
Value of preferred stock = $40
Question 17 What is the value of a $100 par value preferred stock with a 4.0%...
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