A preferred stock pays $3.5 annual dividends each year into the future. If the value of this stock is $51, what is the required rate of return on the preferred stock? (write your answer in 16 and round it to 2 decimal places)
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A: Answer and calculations are given below
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A: annual dividend = 7 Time = perpetuity Discount rate = 10% Assuming face value to be =100
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A: A perpetual dividend is when the same amount of dividend is paid indefinitely.
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A: This question is related to dividend growth model. According to dividend growth model, p=D1r-g…
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A:
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A: Expected return = [ ( Expected dividend / Current Price ) + Growth rate ]
Q: a dividen
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A: Shares are the company’s securities which are issued by the company to raise the funds. Value of…
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A: Value of preference shares = Dividend / Required rate
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Q: Please give handwritten
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A: Dividend of Preferred Stock = $6 Rate of return Required = 10%
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A: The proce of share will be calculated with the help of following formula (Gorden's Model) P0 = D1 ÷…
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- You purchase 115 shares of stock for $53 a share. The stock pays a $7 per share dividend at year- end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation-adjusted) rate of return? Assume an inflation rate of 5%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers If it is necessary.) a. End-of-year stock price = $48 Rate of return Real rate b. End-of-year stock price = $53 Rate of return Real rate c. End-of-year stock price = $60 Rate of return Real rateA stock is expected to pay a dividend of $4 in two years and a $5.3 in three years. You are hoping that you can sell it for $98 at that time. If the required return is 11.8%, what is the stock's value? Round to 2 decimal places. Answer:You purchase 100 shares of stock for $47 a share. The stock pays a $3 per share dividend at year - end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation - adjusted) rate of return? Assume an inflation rate of 4%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.) a) End of year stock price = $43 Real rate of return = ? Real rate= ? b) End of year stock price = $47 Real rate of return= ? Real rate= ? c) End of year stock price = $50 Real rate of return= ? Real rate = ?
- A stock is trading for a share price of $21.99. You expect it to pay a dividend of $1.58 exactly one year from now, and you expect future annual dividends to grow at 2.9% per year indefinitely. What is the stock's required rate of return? Enter your answer as a decimal and show for decimal places. That is, if your answer is 12.5%, enter .1250. Type your answer...A preferred stock from Duquesne Light Company (DQUPRA) pays $2.50 in annual dividends. If the required return on the preferred stock is 5.40 percent, what's the value of the stock? (Round your answer to 2 decimal places.)Consider a stock that wil have price of $31 54 one year from now and pay a dividend of $3.28 in one year. The expected rate of returm is 3.5%. What is the current price of the stock? Enter your response below rounded to 2 DECIMAL PLACES. Number
- Consider a stock that will pay out a dividends over the next 3 years of $1.4, $1.9, and $2.4, respectively. The price of the stock will be $51.81 at time 3. The interest rate is 13%. What is the current price of the stock? Enter your response below rounded to 2 DECIMAL PLACES.Stimpson Inc. preferred stock pays a $.50 annual dividend. What is the value of the stock if your required rate of return is .10? Instruction: Type your answer in dollars, and round to two decimal placesA stock will pay a dividend of $3 and is expected to be worth $54.5 in 1 year. If the stock is currently selling for $55, what is the return? Answer as a percent. Answer:
- You expect a share of stock to pay dividends of $1.00, $1.25, and $1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third year. a. What is the stock price if the discount rate for the stock is 10%? (Round your answer to the nearest cents) b. What is the dividend yield? (Round your answer 2 decimal places)A common stock pays an annual dividend per share of $2.10. The market capitalization rate (required return on equity) is 11.5%. If the annual dividend is expected to remain at $2.10, what is the value of the stock? Round your answer to two decimal places.A company has an outstanding issue of perpetual preferred stock with an annual dividend of $1.65 per share. If the required return on this preferred stock is 9.8%, then at what price should the stock sell? Round your answer to two decimal places.