Moraine, Inc., has an issue of preferred stock outstanding that pays a $7.86 dividend every year...

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Moraine, Inc., has an issue of preferred stock outstanding that pays a $7.86 dividend every year...

Moraine, Inc., has an issue of preferred stock outstanding that pays a $7.86 dividend every year in perpetuity. If this issue currently sells for $103.19 per share, what is the required return?

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Answer 1

Answer #1

Dividend Valueof Stock = Required Rateof Return

103.19 = 7.86 Required Rateof Return

Required Rate of Return = 7.86 / 103.19

Required Rate of Return = 0.07617017152 OR 7.62%

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Dividend Valueof Stock = Required Rateof Return

103.19 = 7.86 Required Rateof Return

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Answer 2

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Moraine, Inc., has an issue of preferred stock outstanding that pays a $7.86 dividend every year...

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Moraine, Inc., has an issue of preferred stock outstanding that pays a $7.86 dividend every year...

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