1. A firm issues preferred stock with a dividend of $2.97. If the appropriate discount rate is 10.57% what is the value of the preferred stock?
2. The market price of a share of preferred stock is $21.15 and the dividend is $2.53. What discount rate did the market use to value the stock?
3. The market price of a share of preferred stock is $36.90. The market uses a discount rate of 6.20%. What is the dividend?
4. Caspian Sea is considering raising $35.00 million by issuing preferred stock. They believe the market will use a discount rate of 10.53% to value the preferred stock which will pay a dividend of $4.04. How many shares will they need to issue?
5. A bank offers 9.00% on savings accounts. What is the effective annual rate if interest is compounded continuously?