The preferred stock will pay a dividend of $1.25 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 12percent on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock.

1.

11.56 dollars

2.

9.65 dollars

3.

11.82 dollars

4.

10.42 dollars