What price should the preferred stock sell for

Reference no: EM13299087

I have purchased a preferred stock whose par value is $500. The preferred stock pays a 4.5% dividend. If investors require a 5.5% rate of return for these shares, what price should the preferred stock sell for?

A. $611.11

B. $508.33

C. $409.09

D. $81.82

Reference no: EM13299087

Questions Cloud

What is the appropriate cost for retained earnings : My Corporation wishes to estimate its cost of retained earnings. The firm's beta is 1.3. The rate on 6-month T-bills is 2%, and the return on the S&P 500 index is 15%. What is the appropriate cost for retained earnings in determining the firm's co..

Business of developing test equipment for the tire industry : Macon, Inc. Macon was a fifty-year-old company in the business of developing test equipment for the tire industry. The company had a history of segregated departments with very focused functional line managers. The company had two major technical dep..

What is the average energy density : A sinusoidal EM wave has an electric field amplitude Em = 30.6 mV/m. What is the average energy density

Explain which is 625 feet long connects two bodies of water : A pump is to be used to draw seawater from the bay at an elevation of 0 to a reservoir at a desalination plant that has a water surface elevation of 255 feet. A 12-inch diameter DIP pipe (CHW = 120) which is 625 feet long connects the two bodies ..

What price should the preferred stock sell for : I have purchased a preferred stock whose par value is $500. The preferred stock pays a 4.5% dividend. If investors require a 5.5% rate of return for these shares, what price should the preferred stock sell for?

Define the same concentration with different ka values : If you compare two acids of the same concentration with different Ka values. Which acid solution should have the lower pH value

Find the rms voltage across the resistor : A 90.0 ohms resistor, a 0.110 H inductor, and a 16.0 uF capacitor are connected in series to a 60.0 Hz source. Find the rms voltage across the resistor

Explain that the heat of combustion of benzene : Assume that the heat of combustion of benzene is -4.18 x 103 kJ/mol. Enter your answer with three significant figures in exponential format (1.23 x 104 = 1.23E4).

What is the break-even point in units for the company : Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incur..

User Account

All Pages