Marcel Co. is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 8 percent thereafter.
Required:
If the required return is 12 percent and the company just paid a $3.60 dividend. what is the current share price? (Do not round your intermediate calculations.)
$124.48
$128.79
$116.30
$131.37
$126.22
2. E-Eyes.com Bank just issued some new preferred stock. The issue will pay a $10 annual dividend in perpetuity, beginning 8 years from now.
Required :
If the market requires a 6 percent return on this investment, how much does a share of preferred stock cost today?
$166.67
$110.84
$105.30
$104.57
$116.38