answer 7.1 a

7-1. One year ago. James Sirlank bought Dell Computer common stock for $20 per share. Today the stock is selling for $19 per share. During the year. James received four dividend payments. each in the amount of $0.20 per share. (a) What rate of return did James earn during the year? (b) What were the (1) dividend yield and (2) the capital gains yield associated with the stock for the year? 7-2. Last year. Julie Johnson bought one share of common stock for $950. During the year, Julie received a $47.50 dividend. Earlier today, she sold the stock for $988. (a) What rate of return did Julie earn on her investment? (b) What were the (1) dividend yield and (2) the capital gains yield associated with holding the stock? 7-3. Express Surgery Center's (ESC) preferred stock, which has a par value equal to $110 per share, pays an annual dividend equal to 9 percent of the par value. If investors require a 15 percent return to purchase ESC's preferred stock. what is the stock's market value? 7-4. The Ape Copy Company's preferred stock pays an annual dividend equal to $16.50. If investors demand a return equal to 11 percent to purchase Ape's preferred stock, what is its market value? 7-5. Out-ofSight 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