E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $20...

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Question

E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $20 in perpetuity, beginning 20 yea

Answer 1

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Answer #1

Value of Preferred Stock in year 19 =Annual Dividend/Required Rate =20/5.65% =353..98
Value of Preferred Stock today =353.98/(1+5.65%)^19 =124.58

Answer 2

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