Epo Pharmaceuticals Inc.has an issue of preferred stock outstanding that has a required rate of return of 9% and pays $6 annual dividends.If the preferred share were issued 3 years ago,what is the current price per share?
A)$51.48
B)$66.67
C)$86.34
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

The price of a preferred stock can be calculated using the formula: Price = Dividend / Required Rate of Return. Here, it is $6 / 0.09 = $66.67. The time since issuance does not affect the current price calculation for preferred stock, as it pays a fixed dividend.