Corporate Finance

posted by .

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

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    You purchase XYZ company's perpetual preferred stock, which pays a perpetual annual dividend of $8 per share. If the appropriate discount rate for this investment is 14%, what is the price of one share of stock?
  2. accounting

    Jones Company is authorized to issue 20,000 shares of no-par, $5 stated-value common stock and 5,000 shares of 9%, 100 par preferred stock. It enters into the following transaction: 1. Accepts a subscription contract to 7,000 shares …
  3. Finance

    Hooks Athletics, Inc., has outstanding a preferred stock with a par value of $30 that pays a dividend of $2.50. The preferred stock is redeemable at the option of the stockholder in 10 years at a price equal to $30. The stock may be …
  4. Finance

    GE issued preferred stock that had a par value of $100. The preferred stock pays a dividend of 6.50%. Investors require 5.7% today on this stock. What is the value of the preferred stock today?
  5. Finance

    A firm has $3 million market value and it sells preferred stock with a par value of $100. If the coupon rate on the preferred stock is 9% and the preferred stock trades at $95, what is the cost of preferred stock financing?
  6. umdnj

    A company has preferred stock that can be sold for $21 per share. The preferred stock pays an annual dividend of 3.5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.25 per share. …
  7. Managerial Finance

    A firm has an issue of preferred stock outstanding that has a par value of $100 and a 4% dividend. If the current market price of the preferred stock is $50, the yield on the preferred stock is
  8. finance

    The First Bank of Ellicott City has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on this stock. What is the current price of this preferred stock given a required rate of return …
  9. finance

    National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $8 per share. The company has been losing money and has not paid preferred dividends for 5 years. There are …
  10. corporate finance

    National Health Corporation (NHC) has a cumulative preferred stock issue outstanding, which has a stated annual dividend of $9 per share. The company has been losing money and has not paid preferred dividends for the last five years. …

More Similar Questions