A companys preferred shares pay a $2 dividend every six months in perpetuity What is the fair market value of the shares just after payment of a dividend if the dividend yield required by the market on shares of similar risk is a 4 compounded semiannually b 5 compounded semiannually ...

The fair market value of the shares is the present value of the dividend pay ...

A companys preferred shares pay a $2 dividend every six months in perpetuity. What is the fair

Question:

A company’s preferred shares pay a $2 every six months in perpetuity. What is the fair market value of the shares just after payment of a if the yield required by the market on shares of similar risk is
a. 4% compounded semiannually?
b. 5% compounded semiannually?
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...