Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...

Question

Question

Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid in perpetuity. a. If the dis

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

a. Current price:

=Dividend/discount rate

=6.93/11%

=63.00

b. Price after 1 year will be the same =63.00

c. there will be no capital appreciation, so:-

Dividend yield =11%

Capital yield =0%

Expected rate =11%

Add a comment

Answer 2

Similar Homework Help Questions

Preferred Products has issued preferred stock with an annual dividend of $7.30 that will be paid...

Preferred Products has issued preferred stock with an annual dividend of $7.30 that will be paid in perpetuity. a. If the discount rate is 10%, at what price should the preferred sell? (Round your answer to 2 decimal places.) Current price $ 73.00 b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) Future price c. What are the (i) the dividend yield; (ii) the capital gains yield; (iii) the expected...
Preferred Products has issued preferred stock with an annual dividend of $6.96 that will be paid...

Preferred Products has issued preferred stock with an annual dividend of $6.96 that will be paid in perpetuity. a. If the discount rate is 12%, at what price should the preferred sell? (Round your answer to 2 decimal places.) b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) c. What are the (i) the dividend yield; (ii) the capital gains yield; (iii) the expected rate of return of the stock?...
the rest of it please Preferred Products has issued preferred stock with an annual dividend of $7.26 that will...

the rest of it please Preferred Products has issued preferred stock with an annual dividend of $7.26 that will be paid in perpetulty. a. If the discount rate is 11%, at what price should the preferred sell? (Round your answer to 2 decimal places.) Current price b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) Future price c. What are the (1) the dividend yield: (1) the capital gains yield;...

A company has issued preferred stock with an annual dividend of $3.08 that will be paid...

A company has issued preferred stock with an annual dividend of $3.08 that will be paid in perpetuity. The current price of the stock is $42.15. What is the expected rate of return on the preferred stock? Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your response below rounded to 2 DECIMAL PLACES.
Stock Expected Dividend Expected Capital Gain A $0 $10 B $5 $5 C $10 $0 A....

Stock Expected Dividend Expected Capital Gain A $0 $10 B $5 $5 C $10 $0 A. If each stock is priced at $110, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 35% (the effective tax rate on dividends received by corporations is 10.5%), and (iii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do...
9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields...

9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? $ Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its...

The expected pretax return on three stocks is divided between dividends and capital gains in the ...

The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Expected Dividend $0 Expected Capital Gain $10 Stock 10 a. If each stock is priced at $170, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 35% (the effective tax rate on dividends received by corporations is 10.5%), and (iii) an individual with an effective...
Nonconstant Dividend Growth Valuation Conroy Consulting Corporation (CCC) has a current dividend of D0 = $2.20....

Nonconstant Dividend Growth Valuation Conroy Consulting Corporation (CCC) has a current dividend of D0 = $2.20. Shareholders require a 9% rate of return. Although the dividend has been growing at a rate of 28% per year in recent years, this growth rate is expected to last only for another 2 years (g0,1 = g1,2 = 28%). After Year 2, the growth rate will stabilize at gL = 6%. What is CCC's stock worth today? Do not round intermediate calculations. Round...
Suppose a stock had an initial price of $85 per share, paid a dividend of $1.60...

Suppose a stock had an initial price of $85 per share, paid a dividend of $1.60 per share during the year, and had an ending share price of $72.00. Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage total return % What was the dividend yield? (Do not round intermediate calculations...

Suppose a stock had an initial price of $50 per share, paid a dividend of $.80...

Suppose a stock had an initial price of $50 per share, paid a dividend of $.80 per share during the year, and had an ending share price of $38. Compute the percentage total return. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Total return % What was the dividend yield and the capital gains yield? (A negative answer should...

Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...

Homework Answers

Add Answer to:
Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...

Post as a guest

Earn Coins

Preferred Products has issued preferred stock with an annual dividend of $7.30 that will be paid...

Preferred Products has issued preferred stock with an annual dividend of $6.96 that will be paid...

the rest of it please Preferred Products has issued preferred stock with an annual dividend of $7.26 that will...

A company has issued preferred stock with an annual dividend of $3.08 that will be paid...

Stock Expected Dividend Expected Capital Gain A $0 $10 B $5 $5 C $10 $0 A....

9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields...

The expected pretax return on three stocks is divided between dividends and capital gains in the ...

Nonconstant Dividend Growth Valuation Conroy Consulting Corporation (CCC) has a current dividend of D0 = $2.20....

Suppose a stock had an initial price of $85 per share, paid a dividend of $1.60...

Suppose a stock had an initial price of $50 per share, paid a dividend of $.80...

Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...

Homework Answers

Add Answer to: Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...

Post as a guest

Earn Coins

Add Answer to:
Preferred Products has issued preferred stock with an annual dividend of $6.93 that will be paid...