What is the annual dividend on TXS preferred stock? If investors require a return of 8% on this Bock and the d dividend is payable 1 year from now, what is the price of TXS preferred stock? Suppose that TXS has not paid dividends on its preferred shares in the last 2 years, but investors believe that it will sun paying dividends again in 1 year. What is the value of TXS preferred stock if it is cumulative and if investors require an 8% rate of return? Problem Common stock value Zero growth Kelsey Drums, Inc., is a well -established supplier of fine percussion instruments to orchestras all over the United States. The company's class A common stock has paid a dividend of $5.00 per share per year for the last IS years. Management expects to continue to pay at that amount for the foreseeable future. Sally Talbot purchased 100 shares of Kelsey class A common 10 years ago at a time when the required rate of return for the stock was 16%.

She wants to sell her shares today. The current required rate of return for the stock is 12%. How much capital gain or loss will Sally have on her shares? Preferred nock valuation Jones Design wishes to estimate the value of its outstanding preferred stock. The preferred issue has an $80 par value and pays an annual dividend of $6.40 per share. Similar-risk preferred stocks are currently earning a 9.5% annual rate of return. What is the market value of the outstanding preferred stock? If an investor purchases the preferred stock at the value calculated in nan a. how much does she gain or lose per share if she sells (he stock when the required return on similar-risk preferred stocks has risen to 10.5%? Explain.