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The stock of Pills Berry Company is currently selling at $70 per share. The firm pays a dividend of $2.80 per share.
a. What is the annual dividend yield? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
b. If the firm has a payout rate of 60 percent, what is the firm’s P/E ratio? (Do not round intermediate calculations and round your answer to 2 decimal places.)
The corporate investors require an after-tax return on the preferred that exceeds their after-tax return on the bonds by 1.0%, which would represent an after-tax risk premium.
The dividend irrelevance hypothesis is based on all of the following assumptions EXCEPT
The beginning share price for a security over a three-year period was $50. Subsequent year-end prices were $62, $58 and $64. The arithmetic average annual rate of return and the geometric average annual rate of return for this stock was
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