Lime Limited issued preference shares at $70, which pay a semi-annual dividend of $4. If your required return as an investor is 12% then what price should you be willing to pay on the market now for these preference shares?
Plz, list the formula
Semiannual Dividend = $4.00
Annual Required Return = 12%
Semiannual Required Return = 6%
Price of Preferred Stock = Semiannual Dividend / Semiannual
Required Return
Price of Preferred Stock = $4.00 / 0.06
Price of Preferred Stock = $66.67
So, you should pay $66.67 for this stock.
Lime Limited issued preference shares at $70, which pay a semi-annual dividend of $4. If your...
Regal Resources have ordinary shares outstanding and is planning to pay a dividend of $2.10 this year. Regal expects this dividend to grow at a constant rate of 4%. If your required return is 10%, what is the price of Regal shares now? Today, on the sharemarket Regal Resources shares are trading at $40, should you buy them? Why? P = $35.00. Should not buy, the shares are overvalued. Plz, list the formula
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