A prestigious investment bank designed a new security that pays a quarterly dividend of $2.25 in perpetuity.

Question:

A prestigious investment bank designed a new security that pays a quarterly dividend of $2.25 in perpetuity. The first dividend occurs one quarter from today. What is the price of the security if the APR is 3.8 percent compounded quarterly?

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...

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