- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 41. Equity Valuation: Concepts and Basic Tools
- Subject 4. Preferred Stock Valuation
CFA Practice Question
Estimate the value of a preferred stock with $100 par value, a $15 dividend, and a 12% required return.
B. $125
C. $150
A. $100
B. $125
C. $150
Correct Answer: B
The value is computed as the dividend of $15 divided by the required return of 12%.
User Contributed Comments 2
| User | Comment |
|---|---|
| sarath | Preferred stock is like a perpetuity... |
| accounting | YES |