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in 2018, montpelier inc. issued a $100 par value preferred stock that pays a 9 percent annual dividend. due to changes in the overall economy and in the company's financial condition, investors are now requiring a 10 percent return. what price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?

Respuesta :

$90  would you be willing to pay for a share of the preferred if you receive your first dividend one year from now.

Dividend =Par value preferred stock × Annual dividend percentage

Dividend=$100 par value ×9%

Dividend=$9

Price = Dividend ÷ Return percentage

price =  $9÷10%

Price = $90

What is dividend and how its work?

A dividend is a portion of a company's profits that is given as either stock or cash to shareholders; it is often paid on a quarterly basis as a gift to investors. The declaration of a company's intention to pay a dividend on a specific date is as good as a promise, unlike the share price, which might fluctuate from day to day.

To know more about dividend, refer:

https://brainly.com/question/17329722

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