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Best Chocolate corporation paid is a dividend of $1.30 at the end of last year. Last year the company earned $1.87 per share and paid

  1. Best Chocolate corporation paid is a dividend of $1.30 at the end of last year. Last year the company earned $1.87 per share and paid Dividends are expected to grow indefinitely. Given a 12.15% ROE and the fact that the investors rate of return for a firm like Best Chocolate characteristics is 8.5%. Compute the value of the stock.

    $27.98

    $28.09

    $31.89

    $30.98

  2. You purchased 500 shares of HSBC preferred stock at $45 per share. Each share of preferred stock pays a $4.50 dividend .If your required rate of return as an investor is 8%, what value would you assign to the stock? What if the price of the stock was $47.50, the stock dividend was $3.50, and your required rate of return was 7.5%?

    $56.25 ; $64.29

    $56.25; $46.67

    $49.50; 46.67

    $31.50 ; $56.25

  3. All In Corporations common shareholders expect to receive $1.635 per share dividend next year based on the fact that they received $1.50 last year and they expect dividend to grow 9% next year. Furthermore, analysts predict that dividends will continue to grow at a rate of 10% into the foreseeable future. If All In were to issue common stock at $37.50 a share, the firm would incur a $4.50 per share cost to sell the new shares. What is the cost of the new common stock issue?

    11.97%

    13.95%

    12.91%

    14.86%

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