Builtrite preferred stock has a 5% coupon based on a par value of $60 a

share. Currently, investors require a 4% return. What is the value of Builtrites

preferred stock?

$6

0

$6

6

$7

5

$9

0

1 points

QUESTION 5

1.

Given the following information, calculate the current value of the stock:

current dividend is $3.00, projected super normal growth for three years at 20%,

growth rate after year 3 should remain constant at 9% and you want to earn a 16%

annual return. What should you pay for the stock?

$68.

62

$56.

89

$72.

82

$61.

33