Cobra Banking Group issued preferred shares 10 years ago with a stated value of $95, and...
Cobra Banking Group issued preferred shares 10 years ago with a stated value of $95, and a dividend yield of 7%. What is the current price of each preferred share if the required return today is 15%?
Homework Answers
Solution :-
Price 10 years ago = $95
Dividend Yield = 7%
So Dividend Per Share = Price * Dividend Yield = $95 * 7% = $6.65
Now Current Price of Preferred Share = Dividend / Required Return = $6.65 / 15% = $44.33
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