Question
Pacific Gas & Electric (NYSE: PCG) has Preferred Stock which pays annual Dividend of $1.50 per share. The Company has faced a lot of lawsuits
Pacific Gas & Electric (NYSE: PCG) has Preferred Stock which pays annual Dividend of $1.50 per share. The Company has faced a lot of lawsuits because of the forest fires in Northern California allegedly caused by faulty PG&E equipment. A share of PG&E Preferred is selling for $22.20 today. If you wanted an annual return of 17%, would you buy PGG Preferred?
Group of answer choices
Yes, because if its misses a Dividend payment of $1.50, then the next payment would triple to $4.50.
No, because the Common Stock of PCG would be safer.
Yes, because Preferred Dividends are paid just after Interest payments.
No, because the Wiling to Pay (WTP) is $8.82 and it is selling for $22.20.
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Public Finance
Authors: Harvey S. Rosen
5th Edition
025617329X, 978-0256173291
