A preferred share pays 8 a year and investors require 10 percent. Its value today is 8 divided by:

1. The price is the annual dividend divided by the rate of return. 2. The dividend is 8 and the required return is 0.10. 3. So the value is 8 divided by 0.10, which is 80. _Source: OpenStax Principles of Finance 2e, Chapter 8, Time Value of Money II._