Dean of Students Office | Iowa State University

If a stock is expected to make a dividend payment of $2.60 and is expected to return 14% but has a growth rate of zero, what is the current price of the stock? $2.60 $18.57: P0 = PMT/r => 2.60/.14 ***This is the same equation to find the value of preferred stock and is also the equation for a perpetuity. ................
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