Big Oil, Inc. has a preferred stock outstanding that pays a $5 annual dividend. If investors’...
Big Oil, Inc. has a preferred stock outstanding that pays a $5 annual dividend. If investors’ required rate of return is 5 percent, what is the market value of the shares? Round your answer to the nearest cent.
$ _____
If the required return declines to 2 percent, what is the change in the price of the stock? Round your answer to the nearest cent.
The price____ (increases or decreases) by $ _____
Homework Answers
| Price = Dividend/(interest rate) |
| = 5/(0.05-0) |
| = 100 |
New price
| Price = Dividend/(interest rate) |
| = 5/(0.02-0) |
| = 250 |
Price increases by 250-100 = 150
Add Answer to:
Big Oil, Inc. has a preferred stock outstanding that pays a $5
annual dividend. If investors’...
1. Big Oil, Inc. has a preferred stock outstanding that pays a $7 annual dividend. If...
1. Big Oil, Inc. has a preferred stock outstanding that pays a $7 annual dividend. If investors' required rate of return is 10 percent, what is the market value of the shares? If the required return declines to 6 percent, what is the change in the price of the stock? 2. What should be the prices of the following preferred stocks if comparable securities yield 7 percent? Why are the valuations different? a. MN, Inc., $8 preferred ($100 par) b....
Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $1.90 at...
Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $1.90 at the end of each year. If investors require an 9% return on the preferred stock, what is the price of the firm's perpetual preferred stock? Round your answer to the nearest cent..
Mackery, Inc., has an outstanding issue of preferred stock that pays a $5.06 dividend every year....
Mackery, Inc., has an outstanding issue of preferred stock that pays a $5.06 dividend every year. If this issue currently sells for $104.49 per share, what return to market investors require on it currently? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)
A preferred stock has a par value of $110 and pays an annual dividend of 5%...
A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar investments have an annual rate of return of 3%, what is the current value of this preferred stock? (round to nearest cent) The answer is $183.33 but please show work how to get answer, preferably how to find it in excel.
Moraine, Inc., has an issue of preferred stock outstanding that pays a $4.75 dividend every year...
Moraine, Inc., has an issue of preferred stock outstanding that pays a $4.75 dividend every year in perpetuity. If this issue currently sells for $98 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return %
Moraine, Inc., has an issue of preferred stock outstanding that pays a $6.15 dividend every year...
Moraine, Inc., has an issue of preferred stock outstanding that pays a $6.15 dividend every year in perpetuity. If this issue currently sells for $95 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return %
Bedeker, Inc., has an issue of preferred stock outstanding that pays a $5.15 dividend every year...
Bedeker, Inc., has an issue of preferred stock outstanding that pays a $5.15 dividend every year in perpetuity. If this issue currently sells for $92 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return
A preferred stock has a par value of $110 and pays an annual dividend of 5%...
A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar investments have an annual rate of return of 3%, what is the current value of this preferred stock? (round to nearest cent). Can you please show me how to do this. ThanK You!!!
Please show calculation methods Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with...
Please show calculation methods
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $65 per share. The preferred shares pay dividends annually at a rate of 10%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 8% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid...
Expected rate of return QUESTION 13 Ellcon Inc preferred stock pays a constant annual dividend of...
Expected rate of return QUESTION 13 Ellcon Inc preferred stock pays a constant annual dividend of $15.37 per share per share? Round your answer to two decimal places (Ex. 50.00) investors' required rate of return on this stock is 14.24%, what is the intrinsic value QUESTION 14
1. Big Oil, Inc. has a preferred stock outstanding that pays a $7 annual dividend. If investors' required rate of return is 10 percent, what is the market value of the shares? If the required return declines to 6 percent, what is the change in the price of the stock? 2. What should be the prices of the following preferred stocks if comparable securities yield 7 percent? Why are the valuations different? a. MN, Inc., $8 preferred ($100 par) b....
Bedeker, Inc., has an issue of preferred stock outstanding that pays a $5.15 dividend every year in perpetuity. If this issue currently sells for $92 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return
Please show calculation methods
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $65 per share. The preferred shares pay dividends annually at a rate of 10%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 8% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid...
Expected rate of return QUESTION 13 Ellcon Inc preferred stock pays a constant annual dividend of $15.37 per share per share? Round your answer to two decimal places (Ex. 50.00) investors' required rate of return on this stock is 14.24%, what is the intrinsic value QUESTION 14
Most questions answered within 3 hours.
-
If a lossless transformer has 1000 turns for a primary winding
and 100 turns for the...
asked 14 seconds from now -
Write the net ionic equation for the precipitation reaction that
occurs when aqueous solutions of potassium...
asked 8 minutes ago -
it
should be written in c++
Your program should take numbers from the user until the...
asked 14 minutes ago -
Buses are powered by chemical reactions. Define matter and the
four states of matter. What is...
asked 32 minutes ago -
Use conservation of energy to find the velocity of a free point
charge q1 at 22cm...
asked 39 minutes ago -
First, describe policies promoted by governments of the
political right to address economic globalization. Second, describe...
asked 56 minutes ago -
M2-9 Completing T-Accounts LO2-4
Following are the transactions of Dennen, Inc., for the month of
January....
asked 56 minutes ago -
Write a program using python that reads from values from a text
file and plots them...
asked 57 minutes ago -
Look up the density of
the metal of the object used in parts A and B...
asked 57 minutes ago -
Discuss strategic considerations that Amazon and NYC politicians
had. Analyze why the deal between Amazon and...
asked 1 hour ago -
A combustion reaction is describes as a carbon source reacting
with oxygen and producing carbon dioxide...
asked 1 hour ago -
Buckminsterfullerence is a recently allotrope of carbon in which
carbon atoms form molecules of formula C_60,...
asked 1 hour ago