Determine the current value per share

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An analyst has gathered the following information for a preferred stock and a common stock issued by Fortis:

Par value of the preferred stock (per share) $25

Dividend rate for preferred stock 76%

Required rate of return on preferred stock 10%

Last dividend paid on common stock (per share) $2.50

Constant growth rate for common stock dividends 3.5%

Beta for the common stock 1.65

Risk-free rate of return 2.5%

Expected return on the overall market 5.5%

Problem 1: Determine the current value per share of both the preferred and common stock of this company.

Reference no: EM132792604

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