Question
A) Currently, Queen Inc. pays no dividends. However, analysts forecast that in 4 years Queen Inc. will pay its first annual dividend of $1.8 and
A) Currently, Queen Inc. pays no dividends. However, analysts forecast that in 4 years Queen Inc. will pay its first annual dividend of $1.8 and dividends will grow at 1.7% per year thereafter. If stocks with similar risk to the equity of Queen Inc. currently earn 14.9%, estimate the current share price of Queen Inc.
B) Investors expect a rate of return of 12% on a preferred stock that has a current price of $51.27. What constant dividend must the stock be paying each year in perpetuity? Enter your response below, rounded to two places.
C) Consider a stock that is expected to pay a dividend of $1.57 a year from now. The current price of the stock is $43.32. The expected rate of return on the stock is 5.8%. What must be the expected growth rate of the dividends? Enter your answer as a percentage. Do not enter the percentage sign into your answer.
D) Consider a stock that has a quarterly dividend of $0.59 and a price of $31.85. What is the dividend yield? Enter your answer as a percentage. Do not include the percentage sign in your answer.
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