Find the the value of a preferred stock with a 6% coupon and $100 par value
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Find the the value of a preferred stock with a 6% coupon and $100 par value

Find the the value of a preferred stock with a 6% coupon and $100 par value with a required rate of return of 10%.

Hint
Accounts & Finance"Here, the value of a preferred stock is the present value of the expected cash flows that is to be received from the stock. So, the cash flows to be received from the preferred stock are basically the fixed rate dividends.Therefore, the Market price of the preferred stock = Dividend / Required returnwhich would be = (Dividend rate x Face Value) / Required return"...
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