Preferred stock is perpetuity with annual cash flows equal to the dividend rate.
Value of the stock = Annual dividend / Required return = 3.50 / 0.0650 = $53.85.
In finance, stocks are shares of divided ownership of a company or corporation. A single share represents partial ownership of the company in proportion to the total number of shares.
Stock, also known as equity, is a security that represents partial ownership of the issuing company. Units of shares are called "shares", which entitle the owner to a proportion of the company's assets and profits equal to the number of shares he or she owns.
Stock represents ownership of a publicly traded company. When you buy shares in a company, you become a co-owner of that company. For example, if a company owns 100,000 shares and you buy 1,000 shares, you own 1% of the shares of the company.
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