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?