Zeta Corporation has issued preferred stocks with no maturity and the annual dividend payment is €25.6.If the rate of return is 8%,find the value of the firm.

Name: Zeta Corporation has issued preferred stocks with no maturity and the annual dividend payment is €25.6.If the rate of return is 8%,find the value of the firm.
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Question

Quizplus · Accepted Answer

The value of a perpetuity (stock with no maturity) is calculated using the formula Value = Dividend / Rate of Return. Here, it's €25.6 / 0.08 = €320.

Zeta Corporation Has Issued Preferred Stocks with No Maturity and the Annual