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23.08.2019 •
Mathematics
Carby hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $2.30 per share. if the required return on this preferred stock is 6.5%, at what price should the preferred stock sell?
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Ответ:
$ 35.38
Step-by-step explanation:
Given data:
Annual dividend per share = $ 2.30
Required return on the preferred stock = 6.5 %
Thus,
Selling price of the preferred stock
= Annual dividend per share / Required return on the preferred stock
on substituting the respective values, we get
Selling price of the preferred stock = $ 2.30 / 6.5% = $ 2.30 / 0.065
or
Selling price of the preferred stock = $ 35.38
Ответ: