Annual dividend-required rate of return

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1. Revelation Co. just paid its annual dividend of $3.3 per share. The company has been reducing the dividends by 7.9 percent each year. How much are you willing to pay today to purchase stock in this company if your required rate of return is 14.1 percent?

2. TrueCrypt Co. has made a new issue of preferred stock. The stock will pay a regular annual dividend of $25, but the first dividend will be paid only 14 years from now. If your required rate of return is 8.14 percent, how much would you be willing to pay for it today?

Reference no: EM131055019

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