What is the expected rate of return on this stock

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Q1. Mai owns shares of Delt Productions preferred stock which she says provides her with a constant 14.3 % rate of return. The stock is currently priced at $45.45 a share. What is the amount of the dividend per share?

Q2. Roadside, Inc. preference shares pays a dividend of $7.50 per share semiannually and sells for $59.70 a share. What is your effective annual expected rate of return if you purchase the shares at the market price?

Q3. Sunny Co. paid $2.8 dividends last year. The dividend is expected to grow at a rate of 4% per year. How much would Sunny's share be worth if the investor requires 12% rate of return?

Q4. Sharp Co. Ordinary shares are currently selling for $11.25 each. Recently the company paid a dividend of $0.8 for each ordinary share. If the dividends are expected to grow at a rate of 5% per year. What is the expected rate of return? If you require a rate of return of 10%, should you invest in the company's ordinary shares? Should you purchase the company's ordinary shares if your required rate of return is 10%.

Q5. Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 12 percent rate of return, how much are you willing to pay to purchase one share of this stock today?

Q6. Fast Motion Co. paid a $2.20 per share annual dividend last week. Dividends are expected to increase by 3.75 percent annually. What is one share of this stock worth to you today if your required rate of return is 15 percent?

Q7. The common stock of Red Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 % annual return?

Q8. The common stock of Fast Deliveries sells for $28.16 a share. The stock is expected to pay $1.35 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 3 % annually and expects to continue doing so. What is the expected rate of return on this stock?

Reference no: EM133017681

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