question archive Keyes Corporation preferred stock pays an annual dividend of $7 per share
Keyes Corporation preferred stock pays an annual dividend of $7 per share
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Keyes Corporation preferred stock pays an annual dividend of $7 per share. Which of the following statements is true for an investor with a required return of 9%?
The value of the preferred stock is $7 because the dividend is fixed at $7 each year.
The value of the preferred stock is $77.78 per share.
The value of the preferred stock is $6.30 per share because of the 9% required return.
The value of the preferred stock is $63.00 per share.
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Answer:
| Value of preferred stock = Annual dividend per share / Required rate of return | |
| Value of preferred stock = 7 / 9% = | 77.78 |
| Answer : The value of the preferred stock is $77.78 per share |
