An issue of preferred stock pays an annual dividend of $4.29 while the firm's preferred shareholders require an 8.1% re...

Question

Question

An issue of preferred stock pays an annual dividend of $4.29 while the firms preferred shareholders require an 8.1% return.

Answer 1

Answer #1

Ans b. $ 52.96

Value of Firm = Dividend / Preferred stock return

= 4.29 / 8.1%

= $ 52.96

Answer 2

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