This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 8 ________ 1. You would like to earn a 9.5 percent rate of return on a 9 percent preferred stock. How much are you willing to pay for 10 shares? a. $94.74 b. $105.56 c. $947.37 d. $1,055.56 ________ 2. The common stock of Andys Sporting Goods sells for $25.40 a share. The company recently paid their annual dividend of $1.30 per share and expects to increase this dividend by 3 percent annually. What is the rate of return on this stock? a. 5.12 percent b. 5.27 percent c. 8.12 percent d. 8.27 percent ________ 3. The Black & Gold Co. is expected to pay a $2.50 annual dividend next year. The market rate of return on this security is 12 percent and the market price is $31.40 a share. What is the expected growth rate of Black & Gold? a. 3.74 percent b. 3.89 percent c. 4.04 percent d. 4.12 percent ________ 4. Battles, Inc. just paid an annual dividend of $1.20 a share. The dividend will increase by 3 percent for the next three years and then increase by 2 percent annually thereafter. What is the present value of this stock at a next three years and then increase by 2 percent annually thereafter....
View Full Document
This note was uploaded on 06/27/2008 for the course FINC 450 taught by Professor Ddavidson during the Spring '08 term at Loyola Chicago.
- Spring '08