Preferred Products has issued preferred stock with an annual dividend of $6.20 that will be paid in perpetuity. a. If the discount rate is 10%, at what price should the preferred sell? (Round your answer to 2 decimal places.) Current price 62.00 b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) Future price 62.00 c. What are the () the dividend yield; () the capital gains yield; (ill) the expected rate of return of the stock? (Enter your answers as a whole percent.) 이% 이% (0) Dividend yield (i) Capital gains yield 10 % (i) Expected rate of return
Preferred Products has issued preferred stock with an annual dividend of $6.20 that will be paid in perpetuity. a. If the discount rate is 10%, at what price should the preferred sell? (Round your answer to 2 decimal places.) Current price 62.00 b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) Future price 62.00 c. What are the () the dividend yield; () the capital gains yield; (ill) the expected rate of return of the stock? (Enter your answers as a whole percent.) 이% 이% (0) Dividend yield (i) Capital gains yield 10 % (i) Expected rate of return
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Preferred Products has issued preferred stock with an annual dividend of $6.20 that will be paid in perpetuity.
a. If the discount rate is 10%, at what price should the preferred sell? (Round your answer to 2 decimal places.)
Current price
62.00
b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.)
Future price
62.00
c. What are the () the dividend yield; () the capital gains yield; (ill) the expected rate of return of the stock? (Enter your answers as a
whole percent.)
이%
이%
(0)
Dividend yield
(i)
Capital gains yield
10 %
(i)
Expected rate of return
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