Preferred stock would be valued the same as a common stock with a zero dividend growth rate.

Name: Preferred stock would be valued the same as a common stock with a zero dividend growth rate.
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Question

Quizplus · Accepted Answer

Preferred stock is valued based on its dividend payments, not its growth potential. Therefore, if the preferred stock has a fixed dividend rate (zero growth rate), it would be valued the same as a common stock with no dividend growth.

Preferred Stock Would Be Valued the Same as a Common