What is the required return on that stock

Reference no: EM133633112

Family Business Report Check:

Part A)

One of my family members wants a seat on the board of directors of a certain real estate company. This company has 205,000 shares of stock outstanding and the stock sells for $78 per share. There are currently 5 seats up for election. If the company uses cumulative voting, how many shares would need to guarantee that she will be elected to this board?

102,501 shares 30,751 shares 68,334 shares 41,000 shares or 34,168 shares

Part B)

A colleague has confided they are moving in a different direction with their investments. He is considering investing in a Big Tech type stock. "Big Tech" is expected to pay an annual dividend of $4.46 forever. He require a 4.39% return on your investment. How much should he be willing to pay for this stock today?

Part C)

A random stock is expected to maintain a constant dividend growth rate of 4.9 percent indefinitely. If the stock has a dividend yield of 6.2 percent, what is the required return on that stock?

Reference no: EM133633112

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