1) The preferred stock of Easy Loan Bank pays an annual dividend of $5.60. It has a require rate of return of 8%. Compute the price of the preferred stock.
2) Ozark Fine Hardwook Furniture Company issued preferred stock many years ago. It carries a fixed dividend of $8 per share. With the passage of time, tields have gone down from the original 8% to 6%. A) What was the original issue price? B) What is the current value of this preferred stock?
3) Arkansas Farms, Inc. pays a $4.20 annual casd dividend (D subscript o) . They plan to maintain the dividend at this level for the foreseeable future as no future growth is anticipated. If the required rate of return by common stockholders (K subscrips e) is 12%, what is the price of the common stock?
4) Medical Devices, Inc. will pay a common stock dividend of $1.60 at the end of the year (D subscript 1). The required rate of return on common stock ( K subscript e ) is 13% The firm has a constant growth rate (g) of 7%. Compute the current price of the stock (P subscript o).