Q1. A preferred stock pays a constant dividend of $2.25. The required rate of return is 13.8%. Calculate its price.
Q2.A company finances its operations with 40 percent debt and the rest using equity. The annual yield on the company's debt is 4.8% and the required rate of return on the stock is 14.9%. What is company's WACC? Assume the tax rate is 30%
Q3.XYZ stock is currently selling for $79.34 per share. The company just paid its first annual dividend of $2.12 a share. The firm plans to increase the dividend by 3.6 percent per year indefinitely. What is the expected return on XYZ stock?