Many preferred stocks are treated as in determining their values.
A)Fixed assets
B)Perpetuities
C)Convertible securities
D)Constant growth securities

Question

Quizplus · Accepted Answer

Preferred stocks are often treated as perpetuities because they have no maturity date and pay a fixed dividend. The value of a perpetuity is derived by dividing the expected annual dividend by the required rate of return.

Many Preferred Stocks Are Treated as in Determining Their Values