--%>

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 : Exdplain how does continuous

    Normal 0 false false

  • Q : Explain Fiscal Committees Fiscal

    Fiscal Committees: The committees of members in every house of the Legislature which review the fiscal impact of proposed legislation, comprising the Budget Bill. Presently, the fiscal committees comprise the Senate Budget and Fiscal

  • Q : Describe GATT and its goal Describe

    Describe GATT, and its goal? GATT is the General Agreement on Tariffs & Trade. This is a treaty that seeks to decrease trade barriers among participant nations.

  • Q : Marketing of hardware stores Normal 0

    Normal 0 false false

  • Q : Market share of large bank holding

    Have the large bank holding companies enhanced their market share at the cost of smaller institutions?No. A study conducted through the Federal Reserve Bank of New York reveals that the increase in the concentration of assets is primarily becaus

  • Q : What is Budget Change Proposal Budget

    Budget Change Proposal (BCP): It is a proposal to modify the level of service or funding sources for activities sanctioned by the Legislature, suggest new program activities not presently authorized, or to remove existing programs.

    Q : Define Allotment Allotment : The

    Allotment: The permitted division of an amount (generally of an appropriation) to be expended for a specific purpose throughout a particular time period. An allotment is usually authorized on line item expenditure basis by program or

  • Q : Define Fund Balance Fund Balance : For

    Fund Balance: For accounting aims, the excess of a fund’s assets over its liabilities. And for budgeting aims, the surplus of a fund’s resources over its expenses.

  • Q : How long do business cycles remain

    Normal 0 false false

  • Q : Basic determinant of transactions

    Normal 0 false false