A Preferred Share Pays a Dividend of $3

question 121

Short Answer

A preferred share pays a dividend of $3.25 per quarter until it is redeemed, at which time the value of the share is $60. What is the fair market value of the share if the redemption date is in 10 years, and shares of this type are currently generating a rate of return of 8% compounded semi-annually?

---

Definitions:

Western Democracies

Countries in the Western part of the world that have a form of government in which power is vested in the people, either directly or through elected representatives.

Privately Owned

Refers to assets, companies, or property that is owned by private individuals or entities, rather than by the public or the government.

Media Companies

Organizations involved in the production, distribution, and/or broadcasting of content through various platforms, such as newspapers, television, and the internet.

Revenue

The income generated by a company or government from its activities, primarily from sales of goods or services or taxation.