Sacramento Light & Power issued preferred stock in 1998 that had a par value of $85. The preferred stock pays a dividend of 5.75%. Investors require a rate of return of 6.50% today on this stock. What is the value of the preferred stock today?
Round to the nearest $1.
A) $100
B) $85
C) $75
D) $16
Answer: C
You might also like to view...
Concerning the covering of exchange market risks, assuming that a depreciation of the domestic currency is anticipated, one can say that there is an incentive for
a. exporters to rush to cover their future needs. b. importers to rush to cover their future needs. c. both exporters and importers to rush to cover their future needs. d. neither exporters nor importers to rush to cover their future needs.
Bonds issued at the same time so that they all have the same maturity date are called secured bonds
Indicate whether the statement is true or false
Marketing guru Philip Kotler advocated for expanding the traditional "four Ps" of marketing, designating public relations the fifth "P."
Indicate whether the statement is true or false
The hedging principle involves the use of hedge funds to manage the firm's working capital
Indicate whether the statement is true or false