chapter 8 hw - chapter 8 Student: _ 1. You would like to...

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chapter 8 Student: ___________________________________________________________________________ 1. You would like to earn a 12.5 percent rate of return on an 8 percent preferred stock. How much are you willing to pay per share for this stock? 2. The common stock of Armstrong Hunting Gear sells for $34.60 a share. The company recently paid its annual dividend of $1.40 per share and expects to increase this dividend by 2.5 percent annually. What is the rate of return on this stock? 3. The Nut Hut is expected to pay a $0.20 annual dividend next year. The market rate of return on this security is 8.5 percent and the market price is $5 a share. What is the capital gains yield? 4. Chambers, Inc. just paid an annual dividend of $1.10 a share. The dividend is expected to increase by 5 percent each year for the next 3 years and then increase by 2 percent annually thereafter. What is the present value of this stock at a discount rate of 15 percent? 5. Small Towne Builders recently announced that it will pay its first annual dividend next year in the amount of
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chapter 8 hw - chapter 8 Student: _ 1. You would like to...

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