A preferred stock from DLC pays $5.10 in annual dividends. If the required return on the preferred stock is 12.1 percent, what is the value of the stock?

Name: A preferred stock from DLC pays $5.10 in annual dividends. If the required return on the preferred stock is 12.1 percent, what is the value of the stock?
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Question

Quizplus · Accepted Answer

The value of a preferred stock can be calculated using the formula: Value = Dividend / Required Return. Plugging in the given values: Value = $5.10 / 0.121 = $42.15.

A Preferred Stock from DLC Pays $5