Question
Webster preferred stock pays an annual dividend of $7.50 a share. What is the maximum price you should pay today to purchase this stock if
Webster preferred stock pays an annual dividend of $7.50 a share. What is the maximum price you should pay today to purchase this stock if you desire a rate of return of 12.25 percent?
a. $60.00
b. $61.22
c. $46.50
d. $91.88
e. $75.00
Nu-Tech stock's last annual dividend was $1.10 a share. Dividends are expected to increase by 25 percent for the next two years and then increase at a constant 4 percent annually. The required return on this high-risk stock is 18.5 percent. What is the current value of one share?
a. $11.09
b. $12.33
c. $12.28
d. $12.63
e. $11.16
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