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March 28, 2015

Homework Help: business math- check my answers please

Posted by Melly on Wednesday, May 4, 2011 at 7:17pm.

A share of perpetual preferred stock pays an annual dividend of $6 per share. If the investors require a 12% rate of return, what should be the price of this preferred stock? a. $57.25, b. $50.00, c. $62.38, $46.75, e. $41.64.

I chose b. $50 because $50 x 12% = $6...is this correct?

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