A firm has an issue of preferred stock outstanding that has a stated annual dividend of $4. The required return on the preferred stock has been estimated to be 16 percent. Calculate the value per share of the preferred stock.
B. Eastern Enterprises, Inc. has an expected dividend next year of $5.60 per share, a growth rate for its dividends of 10 percent, and a required return of 20 percent. Calculate the value of a share of Eastern Enterprises, Inc.'s common stock