A companys preferred shares pay a $1 25 dividend every three months in perpetuity What is the fair market value of the shares just after payment of a dividend if the rate of return required by the market on shares of similar risk is a 5 compounded quarterly b 6 compoundedquarterly ...

The fair market value of a share is the present value of future dividen ...

A companys preferred shares pay a $1.25 dividend every three months in perpetuity. What is the fair

Question:

A company’s preferred shares pay a $1.25 every three months in perpetuity. What is the fair market value of the shares just after payment of a if the rate of return required by the market on shares of similar risk is:
a. 5% compounded quarterly?
b. 6%compoundedquarterly?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...