You are considering buying a preferred stock that has just paid a semi-annually dividend of $10. The required rate of return is 17.0%. The dividends' semi-annual growth rate is 1.2% . The preferred stock is callable after 17 years with a call price of $1,750. If you expect that the preferred stock will be called.

What will be its fair price now?

Answer rating: 100% (QA)

To calculate the fair price of the preferred stock we can use the dividend discount model DDM for... View the full answer