Find what the value of the preferred stock is

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Reference no: EM132941723

Problem 1: 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 ________.

A) 4.00%
B) 6.00%
C) 8.00%
D) 12.00%

Problem 2: A firm has an issue of preferred stock outstanding that has a stated annual dividend of $4. The required return on the preferred stock has been estimated to be 16 percent. The value of the preferred stock is ________.

A) $64
B) $16
C) $25
D) $50

 

Reference no: EM132941723

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