I seem to be getting a different result from the book when calculating intrinsic value of preferred shares. The problem: The book solution is 12.71, but using my financial calculator is as follows:
CF0 = 0
CF1 = 0.3125
F1 = 34
CF2 = 25
F1 = 1
CPT - NPV - I = 3.875 = result of 12.4581.
The problem itself is
dividends of 0.3125 quarterly, retractable (sold back to firm) at $25 dollars (par) in 34 quarters from valuation date. Required return is 15.5% (3.875 quarterly)
What am I doing incorrectly?