A companys preferred stock pays fixed dividend

Assignment Help Financial Management

Reference no: EM13882166

1. A company’s preferred stock pays a fixed dividend of $1.4 per share forever. The market uses a discount rate of 7%. What is the price of this preferred stock? Answer: $______________

2. A company will pay a dividend of $0.90 next year and the dividend is expected to grow at a constant rate of 3% forever. The market is expected to use a discount rate of 10% to value the stock. What is the price of the stock? Answer: $______________

3. The market price of a stock is $15.50 and it is expected to pay a $1.20 dividend next year. The dividend is expected to grow at 3% forever. What is the required rate of return for the stock? Answer: ______________%

4. A firm just paid a dividend of $1.40. The dividend is expected to grow at a constant rate of 4% forever and the required rate of return is 15%. What is the value of the stock? Answer: $______________

5. Partial Credits) A firm just paid a dividend of $2. The dividend is expected to grow at 25% for next two years and then grow at 2% thereafter. The required rate of return on the stock is 11%. What is the value of the stock? The amount of dividend at t = 3 is $______________ What is the value of the stock today? Answer: $______________

6. The risk free rate in the economy is 1.00% and the market risk premium is 5.00%. If an analyst estimates that a company’s β (beta) is 0.9, what is the expected return on the company’s stock? Answer: ______________%

Reference no: EM13882166

Questions Cloud

What is the public health policy regarding tobacco control : How do tobacco control regulations impact individual health care rights? What is the public health policy regarding tobacco control? What is the role of the state and Federal Government in policy making

Describe how listening causes interpersonal conflict : Provide an example of how improved listening and communication could assist with outcomes. Describe how listening causes interpersonal conflict and Give three reasons people don't listen and provide at least one "solution" to each listening problem

Interpret this regression and how would you interpret r 2 : Suppose we were to rede?ne X as the ratio of German CPI to the U.S. CPI. Would that change the sign of X? And why?

What will be the expected return of your portfolio : You are an investor in common stock, and you currently hold a well-diversified portfolio that has an expected return of 10%, a beta of 1.2, and a total value of $12,000. You plan to increase your portfolio by buying 1,000 shares of X at $15 a share. ..

A companys preferred stock pays fixed dividend : A company’s preferred stock pays a fixed dividend of $1.4 per share forever. The market uses a discount rate of 7%. What is the price of this preferred stock? The risk free rate in the economy is 1.00% and the market risk premium is 5.00%. If an anal..

Define and discuss framing : For each of the two selected you will write 2-3 paragraphs analyzing the emotional issues in each one. Define and discuss framing. What strategy would you employ or suggest be used in each of your selected case study. What role could an apology..

Determine which strategies are the best to implement : The manager has a maximum of $50 per employee to spend on the permanent implementation of as many of the strategies. Determine which strategies are the best to implement.

What is the current price of kleins common stock : The last dividend paid by Klein Company was $2.00. Klein’s growth rate is expected to be a constant 4 percent for 2 years, after which dividends are expected to grow at a rate of 6 percent forever. Klein’s required rate of return on equity (ks) is 8 ..

Making deposits into fund continuously at rate : Max starts making deposits into a fund continuously at a rate of (19-2t). He will be making deposits until time t=7. This fund credits a force of interest of 2.1%. Calculate the present value of this fund two ways: one method should use an Increasing..

User Account

All Pages