The First Bank of Ellicott City has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on this stock. What is the current price of this preferred stock given a required rate of return of 13.0 percent?

Answer 1

.13p = 1.65
.13p/.13 = 1.65/.13
P = 12.69

Answer 2

First not correct
4(1.65)/.13
6.60/.13
= $50.77

Answer 3

4(1.65)/.13
6.60/.13
= $50.77