Question: 1. Preferred stock valuation) Midwest Energy Group issued preference shares (par value $10) that pay 8 percent dividend annually. If the company's required rate of return is 15 percent, what is the value of one preference share?
2. (Common stock valuation) Mosser Corporation's common stock paid $1.32 in dividends last year and is expected to grow indefinitely at an annual 7 percent rate. What is the value of the stock if you require an 11 percent return?