FIN 300 Quiz 4 Stock solutions FALL2020 (2).pdf - Quiz#4...

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Quiz #4 Stock Solutions 1. Builtrite preferred stock has a 6%(4%) coupon based on a par value of $45 ($55) a share. Currently, investors require a 5% return. What is the value of Buil trite’s preferred stock?
2. Builtrite common stock is currently selling for $30 ($60) and recently paid a dividend of $1.50 ($3.50). The stock has a projected constant growth rate of 7% (6%). If you purchase this stock, what is your expected rate of return?
3. Builtrite preferred stock pays 4%(5%) dividend based on a par value of $55 ($64). The stock is currently selling at $50 ($70). If you purchase the stock, what is your expected return?
4. Builtrite stock just paid a dividend of $5 ($4) and dividends are expected to

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