1. Box Co. is selling an IPO of stock. They expect to pay the new shares equivalent of $9 dividend per share and expect the stock to be priced at $120 in four years. The market required rate of return is estimated to be 18 per cent. What is value of the stock today?
A. $73.92 B. $79.50 C. $86.10 D. $120.00
2. Boeing has a preferred stock that pays a constant dividend of $2.51 forever. What is Boeing's cost of preferred stock if the price of its preferred stock is currently trading at $22.50?
A) 11.16%
B) 10.49%
C) 10.71%
D) 10.27%
E) 12.28%