Achi Corp. has preferred stock with an annual dividend of $3.21. If the required return on Achi's preferred stock is 8.2%, what is its price? (Hint: For a preferred stock, the dividend growth rate is zero.)

The dividend discount model state that the price of a stock should be the result of the Present Value of all of its future dividends, the Gordon growth model indicates that:

Price per Share = D / (r - g)

Where:

D = the estimated value of next year's dividend

r = The required rate of return

g = the constant growth rate

To this case the value is: $3,21 / 0,082 = $41,71

Achi Corp. has preferred stock with an annual dividend of $3.21. If the required return on​ Achi's preferred stock is 8.2%​, what is its​ price? ​(​Hint: For a preferred​ stock, the dividend growth rate is​ zero.)

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Achi Corp. has preferred stock with an annual dividend of $3.21. If the required return on Achi's preferred stock is 8.2%, what is its price? (Hint: For a preferred stock, the dividend growth rate is zero.)