How much does a share of preferred stock cost today
Course:- Financial Management
Reference No.:- EM131064570

Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $15 in perpetuity, beginning 20 years from now. If the market requires a return of 4.5 percent on this investment, how much does a share of preferred stock cost today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
You have been offered the opportunity to invest in a project that will pay $2,462 per year at the end of years one through three and $10,866 per year at the end of years four
An investment project will have an initial, after-tax cash outlay of $50,000 an after-tax cash inflows of $7,190 per year for 10 years. In addition, it will have an after-tax
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 5 percent there
AA Airlines has a $1,000 face value bond outstanding. The bond has 25 years left until maturity. The bond carries an annual interest payment of $78, and is currently selling f
Sun Investment Inc. current stock price is $450 and its last dividend was $8.00. In view of Sun’s strong financial position and its consequent low risk, its required rate of r
Assume the following exchange rate quotes on British pounds: - Explain how locational arbitrage would occur. Also explain why this arbitrage will realign the exchange rates.
A store offers two payment plans. Under the installment plan, you pay 12.5% down and 12.5% of the purchase price in each of the next 7 years. If you pay the entire bill immedi
You find a certain stock that had returns of 14.4 percent, –22.2 percent, 28.2 percent, and 19.2 percent for four of the last five years. Assume the average return of the stoc