Homework SourseWhat is the value of a preferred stock that pays a perpetual
What is the value of a preferred stock that pays a perpetual dividend of $ 120 at the end of year when the interest rate is 3 percent? Round your response to the nearest dollar.
What is the value of a preferred stock that pays a perpetual dividend of $ 120 at the end of year when the interest rate is 3 percent? Round your response to the nearest dollar.
Solution
Ans:
Explanation:
Value of preferred stock = Dividend / Return
= 120 / 3% = 4000
