1.A share of preferred stock has a par value of $30.It pays a 3%dividend. If the required return is 7%,what is the price of the stock?

The preferred stock's price per share is______(round to the nearest cent)

2.If preferred stock sold for $81 a share and $2.35 dividends were paid annually, what would be the required rate of return?

The required rate of return would be_____(round to two decimal places)

3.You are contemplating the purchase of a stock you will hold for 2 years. You will receive $0.81per year in dividends, and then you expect to sell it for $30.If the required return is 8%,what is the most you would pay for the stock?

The most you would pay for the stock is $______(round to the nearest cent)

4.Carlson Enterprises' common stock dividend is expected to grow at 2% per year. The dividend recently paid was $0.24 per share, and the required return is 9%.

a. What is the estimated value of the common stock?

b. If the value of a common stock was $92 per share and dividends were recently $2.73,but expected to grow at 4% per year, what would be the required rate of return?

5. Bryson Industries's free cash flow to its equity holders (FCFE) was $30 million in its most recent fiscal year that just ended. Bryson's FCFE is expected to grow steadily at

4% per year in perpetuity. The 10-year T-note yield is 2%, the expected market risk premium is 7% and Bryson's beta is 1.2. Bryson has 20 million shares outstanding. What should be the price of each share?

(Hint:Step 1: Find the discounted value of the firm's FCFEs using the constant-growht model and CAPM required return as the discount rate.

Step 2: Divide the total value of equity by the total number of shares outstanding to find the price per share).

The price of each share should be_____(round to the nearest cent)