Discussion
1. A share of preferred stock pays a quarterly dividend of $2.50. If the price of this preferred stock is currently $44, what is the nominal annual rate of return? (select the closest answer)
2. Ewert Enterprises' stock currently sells for $30.50 per share. The stock's dividend is projected to increase at a constant rate of 4.50% per year. The required rate of return on the stock, rs, is 10.00%. What is Ewert's expected price 3 years from today?
3. Flint Fruits is considering two equally risky, mutually exclusive projects, Projects A and B, that have the following cash flows
4. Anderson Associates is considering two mutually exclusive projects that have the following cash flows:
5. Stanson Inc. is considering the purchase of a new machine which will reduce manufacturing costs by $6,000 annually and increase earnings before depreciation and taxes by $6,000 annually. Stanton will use the MACRS method to depreciate the machine, and it expects to sell the machine at the end of its 5-year operating life for $10,000 before taxes. Stanton's marginal tax rate is 40 percent, and it uses a 9 percent cost of capital to evaluate projects of this type. If the machine's cost is $40,000, what is the project's NPV?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.