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  • 06-11-2020
  • Business
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How much would you pay for a share of preferred stock that pays a $3.75 dividend and your required return is 5.25%

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Tundexi
Tundexi Tundexi
  • 06-11-2020

Answer:

$71.43 per share

Explanation:

Price to pay (Present value) = Annual Dividend / Required return

Price to pay (Present value) = $3.75 / 0.0525

Price to pay (Present value) = 71.42857142857143

Price to pay (Present value) = $71.43 per share

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