What is rate of return and the effective annual rate

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1. The next dividend payment by Hot Wings, Inc., will be $3.65 per share. The dividends are anticipated to maintain a 3 percent growth rate forever. Required: If the stock currently sells for $40 per share, what is the required return?

2. A firm has a perpetual preferred stock that pays quarterly dividends of $2.50. If its current price is $60, what is its rate of return (r) and the effective annual rate (EAR)?

3. A firm is considering a project that is expected to generate annual cash flows of $24,000 for 15 years. The project requires an initial investment of $247,103.44. The cost of capital is 8.13%. What is the IRR of the project?

Reference no: EM132039531

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