Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. what’s value of a preferred stock if we assume i

What’s value of a preferred stock if we assume it has a quarterly dividend $1.25 per...

60.1K

Verified Solution

Question

Finance

What’s value of a preferred stock if we assume it has aquarterly dividend $1.25 per share and the required rate of returnis 10%?

$5

$25

$50

$100

Other than dividend growth model, we can employ Market MultipleAnalysis method for stock valuation. We suppose a firm's estimatedearnings per share is $2. The average price to earnings (P/E) ratiofor similarly publicly traded firms is 10. What's the firm'sexpected stock price?

$25

$20

$22.5

$27

Answer & Explanation Solved by verified expert
4.3 Ratings (872 Votes)
Solution Calculation of Value of preferred stock The formula for calculating the value of preferred stock is Annual Dividend of preferred stock Required rate of Return As per the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

What’s value of a preferred stock if we assume it has aquarterly dividend $1.25 per share and the required rate of returnis 10%?$5$25$50$100Other than dividend growth model, we can employ Market MultipleAnalysis method for stock valuation. We suppose a firm's estimatedearnings per share is $2. The average price to earnings (P/E) ratiofor similarly publicly traded firms is 10. What's the firm'sexpected stock price?$25$20$22.5$27

Other questions asked by students

Q

Marshall Corporation is considering leasing a new equipment. The lease lasts for 8 years. The lease...

Finance
Q

The mean monthly mortage payment for homwowners in the local community was $2365, and the standard deviation...

Statistics
Q

Describe the sequence of the ovarian cycle. How do hormones regulate the cycle?

Medical Sciences
Q

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants...

Accounting
Q

39 A body is allowed to fall from altitude 100 m If the time taken...

Physics
Q

6 The two way table shows some information about the number of boys girls and...

Algebra
Q

Solve using the quadratic formula 7x 5x 9 X Round your answer to the nearest...

Algebra
Q

James Inc. purchased the following assets in February 2022 for a total price of $2,900,000....

Accounting
Q

A company had average total assets of $898,000. Its gross sales were $1,084,000 and its...

Accounting
Q

Levine Company uses the perpetual inventory system. April 8 Sold merchandise for $8,400(that had...

Accounting
Q

The Harding Company manufactures skates. The companys income statement for 20X1 is as follows: HARDING...

Finance
Q

Blossom Co. manufactures baseball bats. The companys total overhead consists of assembly costs and inspection...

Accounting