6 The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an annual rate of 8.00 percent for an indefinite number of years. a. If your required rate of return is 10.50 percent, what is the value of the stock for you? b. Should you make the investment? K rk 6 Question 9, B10-10 (book/static) Part 1 of 3 (Measuring growth) Green Gadgets Inc. is trying to decide whether to cut its expected dividend for next year from $8 per share to $5 per share in order to have more money to invest in new projects. If it does not cut the dividend, Green Gadgets' expected rate of growth in dividends is 5 percent per year and the price of their common stock will be $100 per share. However, if it cuts its dividend, the dividend growth rate is expected to rise to 8 percent in the future. Assuming that the investor's required rate of return for Green Gadgets' stock does not change, what would you expect to happen t the price of its common stock if it cuts the dividend to $5? Should Green Gadgets cut its dividend? Support your answer as best you can. Question 10, B10-15 (book/static) HW Score: 0%, 0 of 110 points O Points: 0 of 10 Question 11, B10-16 (book/static) Part 1 of 2 GITES (Related to Checkpoint 10.3) (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of $6.00 per share when the market's required yield on similar shares is 12 percent. The value of the preferred stock is $ per share. (Round to the nearest cent.) HW Score: 0%, 0 of 110 points O Points: 0 of 10 Question 3, P10-10 (similar to) Part 1 of 3 HW Score: 0%, 0 of 110 points O Points: 0 of 10 a. If the market's required yield is 10 percent, what is the value of the stock for that investor? b. Should the investor acquire the stock? GITES Save (Preferred stock valuation) Pioneer's preferred stock is selling for $33 in the market and pays a $3.60 annual dividend. Save HW Score: 0%, 0 of 110 points O Points: 0 of 10 0 Save Sav (Measuring growth) Green Gadgets Inc. is trying to decide whether to cut its expected dividend for next year from $9 per share to $6 per share in order to have more money to invest in new projects. If it does not out the dividend, Green Gadgets' expected rate of growth in dividends is 5 percent per year and the price of their common stock will be $110 per share. However, if it cuts its dividend, the dividend growth rate is expected to rise to 8 percent in the future. Assuming that the investor's required rate of retum for Green Gadgets' stock does not change, what would you expect to happen to the price of its common stock if it cuts the dividend to $6? Should Green Gadgets cut its dividend? Support your answer as best you can.