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Felix edited this page Jun 6, 2014 · 1 revision

A preferred stock that will pay $2.50 per year in annual dividends beginning next year and plans to follow this dividend policy forever. Given an 10% rate of return, what is the value of this preferred stock today?

pv.perpetuity(r = 0.1, pmt = 2.5, type = 0)
[1] -25