How would you price preferred shares?
A) As an annuity
B) As a growing annuity due
C) As a perpetuity
D) As a growing perpetuity

Name: How would you price preferred shares? A) As an annuity B) As a growing annuity due C) As a perpetuity D) As a growing perpetuity
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The best way to price preferred shares is as a perpetuity, which assumes the preferred stock will pay a fixed dividend forever. This method is commonly used by investors to estimate the intrinsic value of preferred stock.

How Would You Price Preferred Shares