What is the stock worth

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Question 1: If a preferred stock pays 3% dividend rate on its par value of $100, and your required rate of return is 10%, what is the stock worth to you today?

Question 2: What is the value of a share of ABC Inc. if they expect to pay a $5 dividend next year and the dividends are expected to grow at a rate of 3.5%. Assume the investor's required rate of return is 9%.

Question 3: Calculate the expected rate of return for a stock selling for $50 that just recently paid a $6 dividend and is expected to increase the dividend each year at a growth rate of 3%. Use at least 3 decimals in your answer.

Reference no: EM133059779

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