How much does share of preferred stock cost today

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Reference no: EM132074181

Marcel Co. is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 8 percent thereafter.

Required:

If the required return is 12 percent and the company just paid a $3.60 dividend. what is the current share price? (Do not round your intermediate calculations.)

$124.48

$128.79

$116.30

$131.37

$126.22

2. E-Eyes.com Bank just issued some new preferred stock. The issue will pay a $10 annual dividend in perpetuity, beginning 8 years from now.

Required :

If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today?

$166.67

$110.84

$105.30

$104.57

$116.38

Reference no: EM132074181

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