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?
Thank You!

8/.14 = 57.14

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. Advanced Algebra

    HELP! WHICH IS THE HIGHEST RISK INVESTMENT? List the following stocks and bonds in order from highest default risk to lowest default risk: A municipal bond in a city with a population of 150,000 A common stock in a company under

  2. business math- check my answers please

    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

  3. Finance Math

    Maytag Company earns $4.80 per share. Today the stock is trading at $59.25. The company pays an annual dividend of $1.40. Calculate (a) the price-earnings ratio (round to the nearest whole number) and (b) the yield on the stock

  4. Math

    Gwen owns 357 shares of common stock in a software company. The software company recently paid a cash dividend of $3.75 per share. If the current price of the stock is $14.75, what is the dividend yield of the stock? 25.42% 2.54%

  1. Finance

    Slater Lamp Manufacturing has an outstanding issue of preferred stock with an $80 par value and 11% annual dividend. What is the annual dollar dividend? If it is paid quarterly, how much will be paid each quarter?

  2. Finance

    Spam Corp. is financed entirely by common stock and has a beta of 1.0. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 8 and a cost of equity of 12.5%.

  3. finance (bonds to stock)

    corporations prefer bonds to preferred stock for financing their operations because? A. prefered stocks require a dividend B. bond interest rates change with the economy while stock dividends remain constant C. the after-tax cost

  4. 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

  1. college business

    A company’s perpetual preferred stock currently trades at $80 per share and pays a $6.00 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost of 4%. What would the cost of

  2. accounting

    When Collum Corporation was organized in January 2011, it immediately issued 10,000 shares of $60 par, 5 percent, cumulative preferred stock and 20,000 shares of $10 par common stock. The company's earnings history is as follows:

  3. investments

    In 2004, Montpellier inc.issued a $100 par value preferred stock that pays a 9% annual dividend. Due to changes in the overall economy and in the company's financial condition investors ar now requiring a 10% return. What price

  4. Finance

    Carter's preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $45.00, what is its nominal (not effective) annual rate of return?

You can view more similar questions or ask a new question.