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a return equal to 1 1 percent to purchase Ape's pre - ferred stock, what is its market value? 7 - 5 Out - of

a return equal to 11 percent to purchase Ape's pre-
ferred stock, what is its market value?
7-5 Out-of-Sight Telecommunications (OST) has preferred
stock outstanding with a par value of $40 per share
that pays an annual dividend equal to 5 percent. (a) If
investors who purchase similar investments require a
10 percent return, what is the market value of OST's
preferred stock? (b) What would be the market value
of the stock if investors require an 8 percent return?
7-6 Your broker offers to sell you shares of Wingler &
Company common stock, which paid a dividend
of $2 yesterday. You expect the dividend to grow
at a rate of 5 percent per year into perpetuity. If the
appropriate rate of return for the stock is 12 percent,
what is the market value of Wingler's stock?
7-7. Alpine Ski Resort has grown at a constant rate, which
equals 4 percent, for as long as it has been in bust-
ness. This growth rate is expected to continue long
into the future. A couple of days ago, Alpine paid
common stockholders a dividend equal to $3 per
share. If investors require a 10 percent rate of return
to purchase Alpine's common stock, what is the mar-
ket value of its common stock?a return equal to 11 percent to purchase Ape's pre-
ferred stock, what is its market value?
7-5 Out-of-Sight Telecommunications (OST) has preferred
stock outstanding with a par value of $40 per share
that pays an annual dividend equal to 5 percent. (a) If
investors who purchase similar investments require a
10 percent return, what is the market value of OST's
preferred stock? (b) What would be the market value
of the stock if investors require an 8 percent return?
7-6 Your broker offers to sell you shares of Wingler &
Company common stock, which paid a dividend
of $2 yesterday. You expect the dividend to grow
at a rate of 5 percent per year into perpetuity. If the
appropriate rate of return for the stock is 12 percent,
what is the market value of Wingler's stock?
7-7. Alpine Ski Resort has grown at a constant rate, which
equals 4 percent, for as long as it has been in bust-
ness. This growth rate is expected to continue long
into the future. A couple of days ago, Alpine paid
common stockholders a dividend equal to $3 per
share. If investors require a 10 percent rate of return
to purchase Alpine's common stock, what is the mar-
ket value of its common stock?
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