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Please Help The Weatherfield Way Construction Company has common and preferred stock outstanding. The preferred stock pays an annual dividend of $7.50 per share, and
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The Weatherfield Way Construction Company has common and preferred stock outstanding. The preferred stock pays an annual dividend of $7.50 per share, and the required rate of return for similar preferred stocks is 11%. The common stock paid a dividend of $3.00 per share last year, but the company expected that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13% What is the per-share value of the company's preferred and common stock? (Use a Financial calculator to arrive at the answers.) Price of the preferred stock $ Price of common stock $ (Do not round Intermediate calculations. Round the final answers to 2 decimal places.) PV of dividends D1 S D2 Total $ Compute the present value of the stock. (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Present value $Step by Step Solution
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