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- What is the cost of preferred stock if the annual dividend is $8.75, stock price is $12, and the flotation cost is $3? How is the cost of preferred stock impacted if the annual dividend increases to $9? What if the annual dividend decreases to $8.50?A stock has a market price of $33.45 and pays a $.95 dividend. What is the dividend yield?A preferred stock pays a dividend of $5.8. If the required return is 12.3%, what is the value of the stock? Answer:
- What is the rate of return on a preferred stock that has a par value of $50, a market price of $46.50, and a dividend of $4.10? A) 8.20% B) 11.34% C) 8.82% D) 12.20%Given the information in the table, if the stock has a required return of 12.6%, what is the value of the stock?What will be the nominal rate of return on a preferred stock with a $100 par value, a stated dividend of 8 percent of par and a current market price of $80.
- A share of preferred stock has a par value of $100, an annual dividend of 2% and a current market price of $67. What is the rate of return on the preferred stock?1. (a) What are the two components of most stocks’ expected total return?(b) How does one calculate the capital gains yield and the dividend yield of a stock?(c) If D1 = RM3.00, P0 = RM50, and the expected P at t=1 is equal to RM52, what are the stock’s expected dividend yield, capital gains yield, and total return for the coming year?2. (a) Are stock prices affected more by long-term or short-term performance? Explain.(b) A stock is expected to pay a dividend of RM2 at the end of the year. The required rate of return is rs = 12%. What would the stock’s price be if the growth rate were 4%?What would the stock’s price be if the growth rate were 0%?3. If D0 = RM4.00, rs = 9%, and g = 5% for a constant growth stock, what are the stock’s expected dividend yield and capital gains yield for the coming year?4. (a) Explain what is meant by the terms “horizon (terminal) date” and “horizon (terminal) value”.(b)Suppose D0 = RM5.00 and rs = 10%. The expected growth rate from Year 0 to Year 1 (g0…Suppose a share of preferred stock sells for $50.25 and pays a dividend of $9.26 each period. What is the discount rate?
- What will be the nominal RoR on a perpetual preferred stock with a $100 par value, a stated dividend of 7% of par, and a current market price of (1) $60, (2) $83, (3) $99, and (4) $136?What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 7% of par, and a current market price of (a) $51, (b) $89, (c) $109, and (d) $137? Round your answers to two decimal places. a % b % c % d %A stock has a dividend yield of 2.85% and a capital gains yield of 6.93%. What is the stock's required return?