Hve Jt Uls d preferred stock usually has a maturity date. investors. a higher required return than common stock 62) Linen Supply Co. paid a dividend of $3.25 on its common stock yesterday. The company's dividends are expected to grow at a constant rateof 5.5% indefinitely. The required rate of return on this stock is 17.5%. You observe a market price of $27.50 for the stock. Should you purchase this stock? a. Yes, the market price is below the intrinsic value of the stock. b. Yes, but only if you can keep the stock for at least 5 years. c. No, the growth rate in dividends is too far below the required return d. No, the market price is above the intrinsic value of the stock. 63) Chambers Corporation's ROE is 18%. Their dividend payout ratio is 80%. The last dividend, just paid, was $2.20. If dividends are expected to grow by the company's internal growth rate indefinitely, what is the current value of Chambers common stock if its required return is 20%? a. $12.89 b. $12.56 c. $15.43 d. $13.90