Value of a Preferred Stock If a preferred stock from Ecology

Value of a Preferred Stock If a preferred stock from Ecology and Environment, Inc. (EEI) pays $21.50 in annual dividends, and the required return on the preferred stock is 7.70 percent, what\'s the value of the stock?

Solution

Value of stock=Annual dividend/required return Value of stock=21.50/.077 Value of stock= 279.22