Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- If a preferred stock from Ecology and Environment, Inc. (EEI) pays $8.50 in annual dividends, and the required return on the preferred stock is 6.40 percent, what's the value of the stock?arrow_forwardKassidy's Kabob House has preferred stock outstanding that pays a dividend of $5 at the end of each year. The preferred sells for $50 a share. What is the stock's required rate of return? Assume the market is in equilibrium with the required return equal to the expected return. rps = %arrow_forwardThe preferred stock of CEPS Group pays an annual dividend of OMR 152.17 and sells for OMR 5.25 a share. What is the rate of return on this security?arrow_forward
- A preferred stock is expected to pay a constant quarterly dividend of $1.75 per quarter into the future. The required rate of return, Rs, on the preferred stock is 12.0 percent. What is the fair value (or price) of this stock? Group of answer choices a. $18.65 b. None of the above c. $37.04 d. $24.36 e. $58.33arrow_forwardA 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_forwardAchi Corp. has preferred stock with an annual dividend of $2.89. If the required return on Achi's preferred stock is 8.1%, what is its price? (Hint: For a preferred stock, the dividend growth rate is zero.) Achi's stock price will be $_______.arrow_forward
- The preferred stock of PAY Inc. pays an annual dividend of $3.75 and sells for $47.80 a share. What is the rate of return on this security?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_forwardTorch Industries can issue perpetual preferred stock at a price of $53.00 a share. The stock would pay a constant annual dividend of $5.50 a share. What is the company's cost of preferred stock, rp? Round your answer to two decimal places. %arrow_forward
- Achi Corp. has preferred stock with an annual dividend of $2.83. If the required return on Achi's preferred stock is 7.5%, what is its price? (Hint: For preferred stock, the dividend growth rate is zero.) Achi's stock price will be $______ (Round to the nearest cent.)arrow_forwardA perpetual preferred stock pays a $1.65 annual dividend and has a required return of 5.81%. The value is closest to A. $28.40. B. $31.33. C. $33.79. D. $36.55.arrow_forwardYour company has preferred stock that has an annual dividend of $2. If the current price is $20, what is the cost of preferred stock?arrow_forward
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