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Toyota Stock Valuation of Nonmaturing Preferred Stock

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Use Excel for solution.

Stock Valuation
Suppose Toyota has nonmaturing (perpetual) preferred stock outstanding
that pays a $1.00 quarterly dividend and has a required return of 12% APR
(3% per quarter). What is the stock worth?

If you use the spreadsheet method shown in the workshop, assume "perpetual" means 63 years (due to a limitation in Excel).
If you use the Excel formula, assume payments are made at the end of the period.

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Solution Summary

Toyota stock valuation of non-maturing preferred stock is provided. Excel formula is used to determined the payments.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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