What is the value of a preferred stock where the dividend rate is 14 percent on a $100 par value, and the market's required yield on similar shares is 12 percent?
Dividend =($100*14%)=$14
Value of preferred stock=Dividend/required return
which is equal to
=($14/0.12)
which is equal to
=$116.67(Approx)
What is the value of a preferred stock where the dividend rate is 14 percent on...
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