Problem 1: Suppose Nabisco Corporation just issued a dividend of $ 2.84 per share. Subsequent dividends will grow at a constant rate of 7.7% indefinitely. If the required rate of return for this stock is 14.4%, what is the value of a share of common stock today?
Problem 2: What are the values of a share of preferred stock that promises to pay $2.52 every year, indefinitely, if you have a required rate of return of 13.3%?
Problem 3: The current price of Janco stock is $28.77. Dividend are expected to grow at 3.4% indefinitely and the most recent dividend was $3.05. What is the required rate of return, dividend yield, and capital gains yield on Janco's stick?
Problem 4: Magnetic Corporation expects dividends to grow at a rate of 14.5% for the next two year. After two years two dividends are expected to grow at a constant rate of 4.7%, indefinitely. Megnetic's required rate of return is 12.1% and they recently paid a $2.55 dividend. What is the value of Megnetic Corporation's common stock?