Toyota - of stock)= D/r = 33.33333 The worth of stock is...

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 (Stock valuation) Suppose Toyota has nonmaturing (perpetual) preferred stock outstanding that  pays a $1.00 quarterly dividend and has a required return of 12% APR (3% per quarter). What is  the stock worth? D(Divid end)= $1.00 r(Requir ed  Return) = 0.03 P(Price 
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Unformatted text preview: of stock)= D/r = 33.33333 The worth of stock is calculated by dividing the dividend which is $1 by required return which is 3% i.e. 0.03 APR (Annual percentage return) which is 12%. Hence quarterly return is 12%/4 = 3%...
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This note was uploaded on 03/23/2012 for the course ACCT 306 taught by Professor Mikewoodard during the Spring '12 term at DeVry Houston.

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