UNC Bancorp has issued preferred stock with no maturity date. It has a par value of...
UNC Bancorp has issued preferred stock with no maturity date. It
has a par value of $100 and pays a quarterly dividend of $2.25. If
the required rate of return is 8 percent, what is the value of the
stock today? (Round answer to 2 decimal places, e.g.
52.75.)
| Value of the stock |
Homework Answers
Given,
Quarterly Dividend = $2.25
Required rate of return = 8%
Quarterly required rate of return = 8%/4 = 2% or 0.02
Now,
So, Value of Preferred Stock is $112.5
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