What is the current value of one share

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1. Webster preferred stock pays an annual dividend of $7.50 a share. What is the maximum price you should pay today to purchase this stock if you desire a rate of return of 12.25 percent?

a. $60.00

b. $61.22

c. $46.50

d. $91.88

e. $75.00

2. Nu-Tech stock's last annual dividend was $1.10 a share. Dividends are expected to increase by 25 percent for the next two years and then increase at a constant 4 percent annually. The required return on this high-risk stock is 18.5 percent. What is the current value of one share?

a. $11.09

b. $12.33

c. $12.28

d. $12.63

e. $11.16

Reference no: EM131595230

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