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What is the value of a preferred stock that pays a perpetual dividend of $220 at the end of each year when the interest rate is 3 percent?

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ogorwyne

The value of a preferred stock that pays a perpetual dividend of $220 at the end of each year when the interest rate is 3 percent is $7333.3

How to solve for the value of the

We have to use the formula

Present Value = CF / I

We have CF = 220 dollars

We have the interest rate = 3 percent

Hence present value = 220/0.03

= $7333.3

What is the present value?

This is the term that is used to refer to the future value that a stock would have when it is converted.

Read more on present value here: https://brainly.com/question/20813161

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