Williams All Night Long DJ, Inc. has outstanding preferred stock that pays an annual dividend of $6.00

Question:

William’s All Night Long DJ, Inc. has outstanding preferred stock that pays an annual dividend of $6.00 per share.

Compute the current price of the preferred stock if the investor’s required return on the preferred stock is:

(a) 8%

(b) 10%

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...