Issued some new preferred stock

Assignment Help Financial Management

Reference no: EM13879326

E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $16 in perpetuity, beginning 5 years from now. If the market requires a return of 3 percent on this investment, how much does a share of preferred stock cost today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM13879326

Questions Cloud

Important goal for healthcare organizations : We learned that market share is an important goal for healthcare organizations. What are some examples of how market share may be improved, or increased?

How much will you pay for the policy : Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent. How much will you pay for the policy?

Growing quickly-what is the current share price : Jen's Fashions 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. The required return is 12 percent and the company just paid a $3.80 annu..

What is the partial payment for the last month : Aquitaine Corporation has borrowed $1.35 million from a bank with the understanding that it will pay $60,000 a month, until the loan is paid off. The bank will charge 6% per annum interest on the unpaid balance, calculated monthly. How long will it t..

Issued some new preferred stock : E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $16 in perpetuity, beginning 5 years from now. If the market requires a return of 3 percent on this investment, how much does a share of preferred stock cost to..

Compute the cost of capital for the three alternatives : The board of directors of Hamilton health plan is considering the following alternative financial structures: A. 30% debt 70% equity B. 40% debt 60% equity C. 50% debt 50% equity The cost of debt is expected to change between 1% and 5% over the range..

Experiencing rapid growth-what is the projected dividend : Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 6 percent per year indefinitely. The required return on this stock is 12 percen..

What is the price of STRIP : A $100,000 10-year Treasury note with a 1% coupon rate paid semi-annually. The current market interest rate is 5%. What is the price of a STRIP that is due after 3 years?

Effective annual rate-what is the duration of the bond : A CD matruing after 6 months with a par of one million dollars paying an interest rate of 1.5% annually, will have an Effective Annual Rate (EAR) of: A bond has 2 year maturity with 5% coupon rate paid semiannually. If the current market interest rat..

User Account

All Pages