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ivolga24 [154]
3 years ago
15

A company is offering perpetual preferred stock (its dividend payments last forever) with a fixed annual dividend of $100. If yo

ur required rate of return on this investment is 12 percent, what is the value of each share
Business
1 answer:
sukhopar [10]3 years ago
8 0

Answer:

833.33

Explanation:

The fixed annual dividend is $100

The required rate of return on this investment is 12%

Therefore the value for each share can be calculated as follows

= 100/(12/100)

= 100/0.12

= 833.33

Hence the value for each share is 833.33

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