that pays a dividende share. What is the in equilibrium with the return equal U tu 8-4 Preferred Stock Rate of Return Nick's Enchiladas has preferred stock outstanding that paysa $5 at the end of each year. The preferred sells for $50 a share stock's required rate of return (assume the market is in equilibri required return equal to the expected return)? 8-5 Nonconstant Growth Valuation A company currently pays a dividend of $2 per share (D = $2) mated that the company's dividend will grow at a rate of 20% pe the next 2 years and then at a constant rate of 7% thereafter. The stock has a beta of 1.2, the risk-free rate is 7.5%, and the market mium is 4%. What is your estimate of the stock's current price? ( = $2). It is esti- ate of 20% per year for after. The company's the market risk pre