What is the value of a preferred stock that pays a $2.10 dividend to an investor with a required rate of return of 6% (round your answer to the nearest $1)?
A) $35
B) $23
C) $17
D) $21

Question

Quizplus · Accepted Answer

The value of a preferred stock that pays a constant dividend can be calculated using the formula: Value = Dividend / Required Rate of Return. Plugging in the values given, we get Value = $2.10 / 0.06 = $35.

What Is the Value of a Preferred Stock That Pays