Company plans to issue perpetual preferred stock

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Reference no: EM131843166

1. A company plans to issue perpetual preferred stock with an annual dividend of $6.50 per share. If the required return on this preferred stock is 8.5%, at what price should the stock sell?

2. The most recent dividend paid by a company was $1.25. the dividends are expected to maintain a constant growth rate of 6% in the future forever. If the stock currently sells for $32.5 per share, what is the required return?

3. A Company just paid a dividend of $0.80 per share, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.25, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price

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Reference no: EM131843166

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