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7. Header Motor, Inc., paid a $3.50 dividend last year. At a constant growth rate of 5 percent, what is the value of the common
7. Header Motor, Inc., paid a $3.50 dividend last year. At a constant growth rate of 5 percent, what is the value of the common stock if the investors require a 20 percent rate of return? (2 marks) Pioneer's preferred stock is selling for $33 in the market and pays a $3.60 annual dividend. a. If the market's required yield is 10 percent, what is the value of the stock to investors? (2 marks) b. Should investors acquire the stock? Explain ( 2 marks)
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