What is the required rate of return on janco stock

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Reference no: EM132679041

Problem 1: Suppose Nabisco Corp just issued a divided of $1.94 per share yesterday. Subsequent dividends will grow at a constant rate of 5.40% indefinitely. If the required rate of return for this stock is 13.30%, what is the value of a share of common stock today?

Problem 2: What is the value of a share of preferred stock that promises to pay $1.95 every year, indefinitely, if you have a required rate of return of 14.10%?

Problem 3: The current price of Janco stock is $27.71. Dividends are expected to grow at 5.80% indefinitely and the most recent dividend paid yesterday was $3.87.

  1. What is the required rate of return on Janco stock?
  2. What is the dividend yield on Jancos Stock? 
  3. What is the capital gains yield on jancos stock?

Problem 4: Mag Corp expects dividends to grow at a rate of 20.00% for the next 2 years. After two years dividends are expected to grow at a constant rate of 3.40% indefinitely. Mags required rate of return is 11.30% and they paid a $1.48 dividend today. Find the value of Mag Corps common stock per share by computing:

Dividend at the end of year 1:
Dividend at the end of year 2:
Dividend at the end of year 3:
Price of stock at end of year 2:
Price of stock today:

Reference no: EM132679041

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