Reference no: EM133043933

Questions -

(1) A firm has an issue of preferred stock outstanding that has a par value of $100 and a 4% dividend. If the current market price of the preferred stock is $50, what the yield on the preferred stock?

A) 4.00%

B) 6.00%

C) 8.00%

D) 12.00%

Q2) A firm has an issue of preferred stock outstanding that has a stated annual dividend of $4. The required return on the preferred stock has been estimated to be 16 percent. What the value of the preferred stock?

A) $64

B) $16

C) $25

D) $50

Q3) A firm has to pay a dividend of $1.20 per share till perpetuity, a zero growth rate of dividends, and a required return of 10 percent. What the value of the firm's preferred stock?

A) $120

B) $10

C) $12

D) $100

Q4) Emmy Lou, Inc. has an expected dividend next year of $5.60 per share, a growth rate of dividends of 10 percent, and a required return of 20 percent. What the value of a share of Emmy Lou, Inc.'s common stock?

A) $28.00

B) $56.00

C) $22.40

D) $18.67

Q5) A firm has experienced a constant annual rate of dividend growth of 9 percent on its common stock and the dividend that was paid this year was $2.70. The firm can earn 12 percent on similar risk involvements. What the value of the firm's common stock?

A) $102.50/share

B) $98/share

C) $90/share

D) $110/share