Determining the appropriate discount rate

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The preferred stock of Rolling Sand Company pays a $4.50 annual dividend. What is the value of the stock if your required rate of return is 10%?

Preferred stock of Leaping Dolphin Inc. pays 8% on the $100 par value. What is the value of the stock if the appropriate discount rate is 6%?

Waterloo Corp. preferred stock is selling for $33 per share in the market and pays a $3.60 annual dividend.

What is the expected rate of return on the stock?

If an investor's required rate of return is 10%, what is the value of the stock for that investor?

Should the investor acquire the stock? Why or why not?

Bing Company common stock paid $1.25 in dividends last year and is expected to grow indefinitely at an annual rate of 7%. What is the value of the stock if you require a 10% return?

You intend to purchase ZZZZ Last Corp. common stock at $50 per share, hold it 1 year, and then sell it after a $6 dividend is paid. How much will the stock price have to appreciate for you to satisfy your required rate of return of 16%?

Waldo Computer Chips Inc.'s current stock price is $36, and its last dividend was $2.40. In view of Waldo's strong financial position, its required rate of return is only 12%. If dividends are expected to grow at a constant rate in the future, and if rs is expected to remain at 12%, then what is Waldo's expected price 5 years from now?

Reference no: EM131068136

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