Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:If a share of preferred stock sells for $50 and it
pays a dividend of $5 per share, what is the
return (in percentage) on that share of stock?
15%
10%
5%
20%
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- A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?arrow_forwardam. 131.arrow_forwardA company’s preferred stock currently sells for $95.47 per share and it pays a $4.00 annual dividend. what is the cost of the preferred stock?arrow_forward
- A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 7%, and if investors require a (n) 11% rate of return, what is the price of the stock? $47.50 $49.00 $50.50 $52.00 $53.50arrow_forwardWhat is the price of a stock with an annual dividend of $30, required return on equity of 10%, and expected dividend growth rate of 7%? Select one: a. $1070 b. $960 , O c. $1015 d. $1135arrow_forwardA company’s perpetual preferred stock currently sells for $87.94 per share, and it pays a $7.24 annual dividend. What is the firm's cost of preferred stock? Express your answer as a percent rounded to two (2) decimal places.arrow_forward
- What is the price of a share today if dividend today (D0) is $5, discount rate (R) 10%, and dividend growth rate (g) 3%. (Explain and show all calculations.)arrow_forward (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of $8.00 per share when the market's required yield on similar shares is 15 percent.arrow_forwardA company has issued preferred shares with a dividend of $0.97. The current price per share is $26.33. What is the required return?arrow_forward
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