Compute its fair market value

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Reference no: EM131959999

1. Find the after-tax return to a corporation that buys a share of preferred stock at $31, sells it at year-end at $31, and receives a $5 year-end dividend. The firm is in the 30% tax bracket. After tax rate of return _____ %

2. A stocks next 2 dividends are as follows: $0.25 and $1.00. After that, the stock is expected to grow at a rate of 4% indefinitely. The required return on this stock is 16%. Compute its fair market value.

Reference no: EM131959999

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