What is the required rate of return on alpha stock

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Reference no: EM132014314

1. The current yield on Alpha's common stock is 4.8%. The company currently pays $2.10 in dividend. The company is expecting that the dividends will decline constantly at a rate of 5% indefinitely. What is the required rate of return on Alpha's stock?

2. Soutil Company’s annual bonds mature in 8 years, have a par value of $1,000, and currently sell for $923.02. The market requires an interest rate of 8.2% on these bonds. What is the bond’s coupon rate?

3. Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $2.74 per share. If the required return on this preferred stock is 6.8%, at what price should the stock sell?

Reference no: EM132014314

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