e-eyes has a new issue of preferred stock it calls 20/20 preferred. the stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. if you require a return of 8 percent on this stock, how much should you pay today?

Respuesta :

A inventory is a preferred time period used to explain the possession certificate of any company.

The required details for Stocks in given paragraph

Price of inventory 19 years from now = 20/8.5% = 235.29

Price of inventory today = rate of inventory 19 years from now/ (1.085)^19 = 49.93

A proportion, on the alternative hand, refers back to the inventory certificates of a specific company. Holding a specific company's proportion makes you a shareholder. Stocks are of types—not unusual place and favored. The distinction is at the same time as the holder of the previous has balloting rights that may be exercised in company decisions, the later doesn't. However, favored shareholders are legally entitled to obtain a sure stage of dividend bills earlier than any dividends may be issued to different shareholders.

There is likewise some thing called 'convertible favored inventory'. This is essentially a favored inventory with an alternative of changing into a hard and fast range of not unusual place shares, normally any time after a predetermined date.

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