What is the value of share of preferred stock

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Reference no: EM132045133

a) What is the value of a share of preferred stock that promises to pay $1.36 every year, indefinitely, if you have a required rate of return of 7.54%?

b) The current price of Tesla stock is $13.28. Dividends are expected to grow at 6.5% indefinitely and the most recent dividend paid yesterday was $2.55. What is the required rate of return, dividend yield, and capital gains yield on Tesla's stock? (show answers to 4 decimal places)

c) Suppose Nike just issued a dividend of $1.12 per share yesterday. Subsequent dividends will grow at a constant rate of 7.8% indefinitely. If the required rate of return for this stock is 10.11%, what is the value of a share of common stock today?

d) Tesla expects dividends to grow at a rate of 15.3% for the next two years. After two years dividends are expected to grow at a constant rate of 8%, indefinitely. Tesla's required rate of return is 11.8% and they paid a $2.05 dividend today. What is the value of Tesla's common stock per share? (Show your answers to the nearest cent)

Reference no: EM132045133

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