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# Finance: Steps on a TI BA II Plus to calculate EMC's preferred stock required ROR

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Walk me through the steps to do this on a TI BA II Plus and the rationale.

EMC has preferred stock outstanding which pays a dividend of \$5.00 at the end of each year.
This stock was issued in perpetuity and has no maturity date. EMC's preferred stock sells for \$60 per share. (Pr. 10-4).

Calculate this preferred stock's required rate of return

##### Solution Summary

The solution shows the steps for the financial calculator plus it explains and solved the problem.

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Assume the next dividend is a year from now.

The perpetuity formula is Dividend/Required return = Stock price.

5/X = 60

X, the required return is 8.3333 ...

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