2. Finite-Lived Preferred Shares When preferred stock has a finite life, the valuation equation becomes: P0=(1+k)1D+(1+k)2D+(1+k)3D++(1+k)kD+(1+k)nPn Which of the following is true of valuing preferred stock? Finite-lived preferred stock can be viewed as perpetual debt. Pn is often set higher than the price at issue to assure capital gains for The dividends must not be discounted since the stock is finite-lived. The fixed dividend (D) continues indefinitely