Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly,...

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Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly,...

Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly, what is the fair price for this preferred stock share?

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Answer 1

Answer #1

Fair price for this preferred stock share = Annual dividend / Required return

Fair price for this preferred stock share = ($1.50 × $4) / 0.05

Fair price for this preferred stock share = $120

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Answer 2

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Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly,...

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Homework Answers

Add Answer to: Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly,...

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Warren Buffet expects a 5% return on Goldman Sack's preferred stock, and the dividend is expected to be $1.50 quarterly,...