Homework Answers
Question)
Required return on the preferred stock = Annual Dividend/ Price of the Preferred stock
= $2/$20 = 10%
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A preferred stock pays a dividend of $1.00 every 6 months. What is the required return...
2.) SPI's preferred stock pays a $1.00 dividend per quarter. The required return, r, is 2.5%...
2.) SPI's preferred stock pays a $1.00 dividend per quarter. The required return, r, is 2.5% per quarter. a) First assume the dividend will not grow. What is the price of a share of SPI preferred stock? b) What is the price if the dividend were expected to grow at 0.5% per quarter?
1. LLP Utility paid a dividend this year of $1.00/share. they have increased their dividend payout...
1. LLP Utility paid a dividend this year of $1.00/share. they have increased their dividend payout 5% every year for the past 50 years and expect this to continue indefinitely. the stock currently sells for $20. other info: LLP beta = .9; treasury return =3.5%; market premium = 4%. a) using the CAPM model, what is the required return for the stock? carry answer out to one decimal place. b) using the dividend growth model, what is the required return...
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return...
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return on T-Bill is 3% and the market risk premium is 8%. What is the intrinsic value of the preferred stock if the beta of the preferred stock is 1.257 Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year. Predicted to grow at the rate of 8% per year. The firms market capitalization rate is 14%. Using the constant...
Can you show formula and steps please 1) A firm pays a current dividend of $5 and...
Can you show formula and steps please 1) A firm pays a current dividend of $5 and is expected to grow this at 20% for 1 year, 10% in year 2 after that, and then at 5% per year thereafter. If required return is 10%, what is current price of the stock? 2) You analyze two different 10-year bonds in the market, issued by different companies. You note that bonds from company A have a higher yield-to-maturity (YTM) than company B. Describe generally...
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17....
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
6. AOK preferred stock pays an annual dividend of $6.50. What is the rate of return...
6. AOK preferred stock pays an annual dividend of $6.50. What is the rate of return if the stock currently sells for $73.03 per share? 8.90% Please Show All Work
4. If a stock is expected to pay a $2 dividend, and has an expected growth...
4. If a stock is expected to pay a $2 dividend, and has an expected growth rate of 9%, what is the expected rate of return if the stock sells for $50. 5. What price would you pay for a stock that just paid a $1 dividend has a 6% growth rate, if your required rate of return is 15%? 6. What is the expected rate of return on a stock if the risk free rate is 2%, the market...
A stock has a beta of 0.85, the expected return on the market is 12 percent,...
A stock has a beta of 0.85, the expected return on the market is 12 percent, and the risk-free rate is 6 percent. What must the expected return on this stock be? Multiple choice 16.2% 11.54% 10.54% 11.1% 11.65% Alberto Trucking is expected to pay an annual dividend of $2.30 per share next year. The stock is currently selling for $32.50 a share. What is the expected total return on this stock if that return is equally divided between a...
The Brownstone Corporation has 6 million shares of common stock outstanding, 600,000 shares of preferred stock...
The Brownstone Corporation has 6 million shares of common stock outstanding, 600,000 shares of preferred stock that pays an annual dividend of $8, and 200,000 $1,000 par value bonds with a 10% coupon (semi-annual interest) and 20 years to maturity. At present, the common stock is selling for $50 per share, the bonds are selling for $950.62 per $1,000 of face value, and the preferred stock is selling at $74 per share. The estimated return on the market is 13%,...
12) 12) AB Co. stock pays a constant anual dividend sells for $56.07 a share, and has a market rate of return of 12...
12) 12) AB Co. stock pays a constant anual dividend sells for $56.07 a share, and has a market rate of return of 12.2 percent. What is the amount of the next annual dividend? A) $6.21 B) 56.84 C) 55.67 D) $5.94 E) $7.30 13) 15) Dexter Mills issued 20-year bonds one year ago at a coupon rate of 10.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 8.2 percent, what...
2.) SPI's preferred stock pays a $1.00 dividend per quarter. The required return, r, is 2.5% per quarter. a) First assume the dividend will not grow. What is the price of a share of SPI preferred stock? b) What is the price if the dividend were expected to grow at 0.5% per quarter?
Dick's Co Pays an annual dividend of $6 to its preferred stock. The rate of return on T-Bill is 3% and the market risk premium is 8%. What is the intrinsic value of the preferred stock if the beta of the preferred stock is 1.257 Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year. Predicted to grow at the rate of 8% per year. The firms market capitalization rate is 14%. Using the constant...
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
12) 12) AB Co. stock pays a constant anual dividend sells for $56.07 a share, and has a market rate of return of 12.2 percent. What is the amount of the next annual dividend? A) $6.21 B) 56.84 C) 55.67 D) $5.94 E) $7.30 13) 15) Dexter Mills issued 20-year bonds one year ago at a coupon rate of 10.2 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 8.2 percent, what...
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