If Neal O'Danny preferred stock pays an annual dividend of $2.80,and investors require a 9% return,what is the value of O'Danny's preferred stock today?

Question

Quizplus · Accepted Answer

The value of O'Danny's preferred stock today, given an annual dividend of $2.80 and a required return of 9%, is calculated using the formula for valuing preferred stock: Price = Dividend / Required Rate of Return. Thus, the value would be $2.80 / 0.09 = $31.11.

If Neal O'Danny Preferred Stock Pays an Annual Dividend of $2.80,and