Quiz #4 Stock Solutions Fall 2020
Builtrite preferred stock has a 5%(4%) coupon based on a par value of $50 a
share. Currently, investors require a 6% (4%) return. What is the value of
trite’s preferred stock?
Given the following information, calculate the current value of the stock: current
dividend is $3.00, projected super normal growth for three years at 20%, growth
rate after year 3 should remain constant at 9% (11%)and you want to earn a 16%
annual return. What should you pay for the stock?
Builtrite common stock is currently selling for $40 ($50) and recently paid a
dividend of $3.00 ($3.50). The stock has a projected constant growth rate of 8%.