Homework Help: Corporate Finance

Posted by Christie on Sunday, April 4, 2010 at 6:22pm.

Taylor Inc. has preferred perpetual stock outstanding that has a par value of $100 per share and a dividend yield of 9.4% of stated value. If the appropriate interest rate for Taylor’s preferred stock is 8.3%, how much is each share of preferred stock worth?

Corporate Finance - Christie, Sunday, April 4, 2010 at 7:27pm
Figured it out:

dividend yield x par value divided by interest rate

.094*100/.083 = $113.25

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