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For all the following, consider the company, Sacks O'Corn, Inc. (Ticker: SOC) a. It's preferred stock pays a dividend of $1.00. If you require a

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For all the following, consider the company, Sacks O'Corn, Inc. (Ticker: SOC) a. It's preferred stock pays a dividend of $1.00. If you require a return of 10 percent, what is the most you would pay for their preferred stock today? b. C. Preferred stock is ok, but you really prefer (ha!) common stock because of the growth potential. Consider that SOC just paid a regular dividend of $4. If the required return on equity is 20 percent, what is the most you'd pay for their common stock if you expect the dividend to grow at 10 percent per year? After the market closed today, SOC announced that it will reduce its dividend next year by 75% and by 50% the following year (based on the $4 just paid). Growth is expected to bounce back 50% in the third year, then resume its 10% annual growth rate indefinitely. What is the most you would pay for SOG common stock when the market opens tomorrow morning? (Assume no change in the required return.) d. Closely examine the model you are using to calculate stock value. List five (5) major factors that the company can control that directly influence the value of its stock in this model. Be extremely specific!!! That is, as CEO what can you control

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