Ask a New Question

In 2004, Montpellier inc.issued a $100 par value preferred stock that pays a 9% annual dividend. Due to changes in the overall economy and in the company's financial condition investors ar now requiring a 10% return.

What price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?

I would pay $90 per share.

Thanks!

Ask a New Question or answer this question.

Similar Questions

Your required rate of return on company XYZ's preferred stock is 12%. Their preferred stock pays a fixed annual dividend of $4.
1. 1 answer
GE issued preferred stock that had a par value of $100. The preferred stock pays a dividend of 6.50%. Investors require 5.7%
1. 0 answers
The First Bank of Ellicott City has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend
1. 3 answers
Alpha Corporation has outstanding an issue of preferred stock with a par value of $100. It pays an annual dividend equal to 8
1. 1 answer

more similar questions