Question

a dividend on its perpetual preference share. Today, the share is selling at $16.89, If the required rate of retun for uch shares is 10.7 percent pa Each quarter, a company pays g quarterly, what is the quarterly dividend paid by this company? to the nearest cent dan't include S sign

Answer 1

effective annual required return	(1+r/n)n-1	(1+10.7%/4)^4-1	11.14%
preferred dividend per annum	effective annual required return = preferred dividend/market price	11.14% =(preferred dividend/16.89)	preferred dividend = 16.89*11.14%	1.881546
quarterly dividend = annual dividend/4	1.8815/4	0.47
which of the following best describes the constant growth dividend discount model	option is D	it is the formula for the present value of growing perpetuity	future cash flows are discounted at a rate equal to required rate of return