The constant growth model used for evaluating the price of a share of common stock can also be used to find the price of perpetual preferred stock or any other perpetuity.

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The constant growth model, also known as the dividend discount model, can be used to find the price of any asset that pays a constant cash flow indefinitely, including perpetual preferred stock or perpetuities. The formula for the constant growth model is P = D/(r-g), where P is the price of the asset, D is the expected cash flow or dividend, r is the required rate of return, and g is the expected constant growth rate of the cash flow.

The Constant Growth Model Used for Evaluating the Price of a Share