--%>

Describe usual pattern of cash flows

Describe usual pattern of cash flows for share of preferred stock? How does the market fidn out the value of a share of preferred stock, given these promised cash flows?
Preferred stock contains no maturity date hence, it has no maturity value. Its future cash payments are dividend payments which are paid to preferred stockholders at regular time intervals for so long as they (or their heirs) own the stock. Cash payments from preferred stock dividends are scheduled to continue forever. In order to value preferred stock, we adapt the discounted cash flow model to reflect that preferred stock dividends are perpetuity.

   Related Questions in Finance Basics

  • Q : Describe trustworthy collateral from

    Describe trustworthy collateral from the lenders' perspective? Describe whether accounts receivable and inventory are trustworthy collateral. Assets which are readily marketable, of stable value, and not likely to "disappear" make for trustwort

  • Q : Growth rate of its real GDP Normal 0

    Normal 0 false false

  • Q : Define Appropriations Limit

    Appropriations Limit, State (SAL): The constitutional limit on the expansion of some appropriations from tax proceeds usually set to the level of the previous year's appropriation limit as adjusted for modifications in cost of living

  • Q : Assignments i want to write final state

    i want to write final state report. My state is Texas.

  • Q : What is Cash Flow Statement What is

    What is Cash Flow Statement: It is a statement of cash receipts and disbursements for a particular time period.

  • Q : Describe the importance of additional

    Normal 0 false false

  • Q : Explain Financial Reporting Financial

    Financial Reporting: It is a set of documents made generally by government agencies at the end of accounting period. It usually enclose summary of accounting data for that time period, with background forms, notes, and other information.

  • Q : Influence of opportunity costs How do

    How do opportunity costs influence the capital budgeting decision-making procedure? Opportunity costs reflect the foregone benefits of alternative not selected when a capital budgeting project is chosen. Any decrease in the cash flows of the fi

  • Q : Define One-Time Cost One-Time Cost : A

    One-Time Cost: A proposed or real expenditure that is non-recurring (generally only in one annual budget) and not permanently comprised in baseline expenditures. The departments make baseline adjustments to eradicate prior year one-time costs and suit

  • Q : Define Special Funds Special Funds :

    Special Funds: For legal base budgeting purposes, funds produced by statute, or administratively per Government Code Section 13306, employed to budget and account for taxes, licenses, and fees which are restricted by law for specific activities of the