CFA Practice Question

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CFA Practice Question

Estimate the value of a preferred stock with $100 par value, a $15 dividend, and a 12% required return.

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
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