Reference no: EM132563628

Question A) A share of perpetual preferred stock pays an annual dividend of $9.8 per share. If investors require a 13.9 percent rate of return, what should be the price of this preferred stock?

Question B) The last dividend on Spirex Corporation's common stock was $5.9, and the expected growth rate is 10 percent. If you require a rate of return of 29.5 percent, what is the highest price you should be willing to pay for this stock?

Question C) The last dividend paid by Klein Company was $1.00. Klein's growth rate is expected to be a constant 8 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 (rs) is 12 percent. What is the current price of Klein's common stock?

Question D) A firm expects to pay dividends at the end of each of the next four years of $2.00, $1.50, $2.50, and $3.50. If growth is then expected to level off at 13 percent, and if you require a 18 percent rate of return, how much should you be willing to pay for this stock?