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Corporate Finance

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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 -

    Figured it out:

    dividend yield x par value divided by interest rate

    .094*100/.083 = $113.25

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