View Full Version : Return of Preferred Stock
djroberts73
Sep 11, 2009, 08:11 AM
Sony $4.50 preferred is selling for $65.50. The preferred dividend is nongrowing. What is the required return on Sony preferred stock?
ArcSine
Sep 11, 2009, 08:53 AM
Investors are willing to pay 65.50 for stock that will return 4.50 each year indefinitely. What ROI (return on investment) does that represent? The "required return" means the ROI which is required by investors, as evidenced by the price they're willing to pay for the stock.
I.e. it's the ROI you'll calculate on this Sony pfd.
dmosrie
Feb 7, 2010, 12:17 PM
Sony $4.50 preferred is selling for $65.50. The preferred
Dividend is nongrowing. What is the required return on Sony preferred stock?