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7. Chill Pill Pharmaceuticals is trying to determine a fair price for its new issue of stock. Its past dividends are: 20164-$2.15, 2017-$2.18, 2018-$2.25, 2019-$2.36, 2020- $2.42. The required rate of return for the stock is 12% and the firm expects to pay a dividend of $2.58 per share. 8. What is a price for preferred stock from Feelin' Groovy Movie Corporation if the required rate of return 14% and it pays a dividend per share of $257? 9. What is the required rate of return for Terrific Pacific Underwater Divers if the stock has a beta of 2.8 risk-free rate of 2.4% and a market risk premium of 7%? 10. What is the holding period return for equipment that was purchased six years ago, has generated $8500 total revenue, cost $35,000 when new and can be resold for $32,000 15.77 11. The law firm of Nab-bem and Robb is considering selling stock. It has past dividends of: 2017 - $1.15, 2018- $1.27, 2019- $1.38, 2020 - $1.47. What should the stock sell for if the required rate of return is 12%? 12. Drs. Hack & Whack Plastic Surgeons is considering selling preferred stock. What would be the required rate of return if the stock sells for $2,500 and has an annual dividend of $185? 7.73% 7.2% Answers Including Growth Rates (in random order): 6.55% 4.75% 7% $1835.71 15.7% 7.4% 7.2% 22% 3% $53.33 9% $28.67 5% 4%