Value of Preferred Stock

B

The missing information is the required rate of return in order to discount the dividend payout.

To calculate the value of the preferred stock, we can use the dividend discount model (DDM). The DDM values a stock by considering the present value of its expected future dividends.

In this case, we are given that the preferred stock has a par value of $100 and a dividend payout of $8 per year. We need to determine the value of the preferred stock based on this information.

The DDM formula is as follows:

Value of Stock = Dividend / Required Rate of Return

The required rate of return is the rate of return investors expect to earn on the stock. This rate is usually determined by factors such as the riskiness of the stock and prevailing market conditions. However, since the question does not provide the required rate of return, we cannot calculate the value of the preferred stock.

Therefore, the correct answer is B. not enough information to calculate it.