Value of a Preferred Stock If a preferred stock from Ecology and Environment,Inc.(EEI)pays $2.50 in annual dividends,and the required return on the preferred stock is 5.8 percent,what's the value of the stock?
A)$0.15
B)$0.43
C)$14.50
D)$43.10

Question

Quizplus · Accepted Answer

The value of a preferred stock is calculated by dividing the annual dividend by the required rate of return. Here, $2.50 / 0.058 = $43.10.

Value of a Preferred Stock If a Preferred Stock from Ecology