Nuray Corp.preferred stock pays a $.50 annual dividend.What is the value of the stock if your required rate of return is 10%?

Name: Nuray Corp.preferred stock pays a $.50 annual dividend.What is the value of the stock if your required rate of return is 10%?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Preferred stock value can be found by dividing the annual dividend by the required rate of return. In this case, $0.50 divided by 0.10 equals $5.00. Therefore, the value of the preferred stock is $5.00.