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Common and Preferred Stocks Valuation Exercises: Question 1 . Boston Company has just paid dividends of $ 2 . 5 per share, which the company
Common and Preferred Stocks Valuation Exercises:
Question Boston Company has just paid dividends of $ per share, which the company projects will grow at a constant rate of percent forever. If Boston Company's shareholders require percent rate of return, what is the price of its common stock?
Question You plan to buy Bulldog Colporation' stock. You predict that Bulldog will pay dividends of $ in year and $ in ye ar spectively. You are also confident that you can sell the stock for $ per share at the end of year If you require a percent return on the stock, what is its fair price from your perspective?
Question Company BMI will experience a supernormal growth rate of in the next two years. The growth rate will then level off to from year and beyond. The most recent dividend payment was $ and the required rate of return for BMI stock is What is the intrinsic value of the BMI stock?
Question Beverly Company will pay a dividend of $ per share next year, which will continue to grow at a constant rate forever. Current stock price is $ and the required rate of return is percent. What is the constant dividend growth rate?
Question BFI Corporation has a preferred stock issue outstanding, which carries a par value of $ and a fixed dividend rate of percent. If the market requires a rate of return of percent to hold this preferred stock, what is its market price today?
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