CMS Energy has both preferred stock and common stock. The preferred stock pays a perpetual dividend of $4.50 and you expect a 4.09% rate of return. The common stock carries a $1.53 current dividend (D0). Dividends are expected to grow by 7.1% per year and you expect a 9.7%. rate of return. What are the values of both stocks?

You are evaluating a company who has a new, large competitor entering the market. How can this impact our financial ratio analysis and our intrinsic valuations for their stock.