Question
A B 1 Last quarterly dividend $0.75 2 Required rate of return 10% 3 Price ? Suppose that a preferred stock is expected to pay
| A | B | |
| 1 | Last quarterly dividend | $0.75 |
| 2 | Required rate of return | 10% |
| 3 | Price | ? |
Suppose that a preferred stock is expected to pay a $0.75 dividend every quarter indefinitely. If the required rate of return is 10% with quarterly compounding, what should be the formula on cell B3 to determine the price of this stock?
a. =B1/B2/4
b. =B1/B2
c. =B1/(B2/4)
d. =B1*4/(B2/4)
e. =B1/(B3
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Risk Management And Financial Institutions
Authors: John C Hull
6th Edition
1119932483, 9781119932482
