Preferred Stock Rate of Return

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  Formula for Preferred Stock Preferred Stock Price = Preferred Dividend/Required Rate of Return We have Stock Price = $55 Dividend = $3 Then 55 = 3/ Require Rate of Return or Require Rate of Return = 3/55 = 5.45%.

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  What is the required rate of return (yield) on the preferred stock? Rate of Return (Yield) Tronic Technology has preferred stock outstanding that pays a $4.50 annual dividend. It has a price of $52. The required rate of return is 10%.

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  Stock = Annual dividend/Original required rate of return =8/8% =$100 CURRENT VALUE b) Price of Preferred Stock = Price of Preferred Stock = Annual dividend/New required rate of return =8/6% =$133.33 This solution helps with questions

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  Holding Period Return for the Stock = 40.85% CHAPTER 10: PROBLEM 14 Price of Preferred Stock Last Year $92.73 Current Price of Preferred Stock $95.89 Preferred Stock Dividend 5.50% Face Value of Preferred Stock $100 Total Return

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• Value of preferred stock

  329963 Value of preferred stock A firm has an issue of preferred stock outstanding that has a stated annual dividend of $4. The required return on the preferred stock has been estimated to be 10%. Compute the value of the preferred stock.