A preferred stock from DLC pays $3.00 in annual dividends. If the required return on the preferred stock is 9.3 percent, what is the value of the stock?

Name: A preferred stock from DLC pays $3.00 in annual dividends. If the required return on the preferred stock is 9.3 percent, what is the value of the stock?
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Question

Quizplus · Accepted Answer

The value of a preferred stock is calculated by dividing the annual dividend by the required return. Here, $3.00 / 0.093 = $32.26.

A Preferred Stock from DLC Pays $3