Question
Could I have help solving these two problems? 1.Fifth National Bank just issued some new preferred stock. The issue will pay an annual dividend of
Could I have help solving these two problems?
1.Fifth National Bank just issued some new preferred stock. The issue will pay an annual dividend of $24 in perpetuity, beginning 13 years from now. If the market requires a return of 3.8 percent on this investment, how much does a share of preferred stock cost today?
2.Hughes Co. is growing quickly. Dividends are expected to grow at a rate of 26 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 12 percent and the company just paid a $1.90 dividend, what is the current share price?
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