Preferred Stock

Question

Mar 25, 2007, 02:30 PM

MeghanJ07

New Member

Join Date: Mar 2007

Posts: 1

Preferred Stock

Mark Bank just issued some new preferred stock. The issue will pay a $19 annual dividend in perpetuity, beginning 5 years from now. If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today?

The answer is $250.83 -- no idea how to get the answer though.

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