What is the required rate of return on a preferred stock with a $50 par value,a stated annual dividend of 7% of par, and a current market price of (a) $30,(b) $40, (c) $50, and (d) $70 (assume the market is in equilibrium with therequired return equal to the expected return)?

Q: A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per…

A: Formula for current price of the stock is: Current price = Expected dividend / (required return -…

Q: Which of the following statements is CORRECT? If a stock's dividend is expected to grow at a…

A: First statement: If stock dividend is grow at 6% means stock price increase by 6%. Investor will get…

Q: What will be the nominal RoR on a perpetual preferred stock with a $100 par value, a stated dividend…

A: Par value = $100 Dividend rate = 7% Annual dividend = 100*0.07 = $7

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A: Dividend Yield = Annual Dividend / Current Price

Q: PREFERRED STOCK RATE OF RETURN What will be the nominal rate of return on a per- petual preferred…

A: Nominal rate of return = Dividend / Current market price Where, Dividend = Par Value * Dividend Rate…

Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…

A: This question require us to compute the nominal rate of return on a preferred stock from following…

Q: For a non-dividend paying stock with price S(t) at time t, you are given the followings: • The…

A: Stock Price = 80 Rate of return = 0.12 Volatility = 0.3

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A: The required rate on the stock depends on the dividend paid and corresponding price of stock…

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A: Given, Par Value = $300 Dividend = 8% of par value Current Price = $270

Q: Find the dividend yield. Round to the nearest hundredths of a percent.

A: Information Provided: Annual dividend = $0.60 per share Current price = $31.00

Q: Here are forecasts for next year for two stocks:     Stock A Stock B Return on equity   17 %…

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Q: Expected dividend yield 5%

A: Ans.   D.stock X pays higher dividend per share than stock y

Q: Calculate the nominal rate of return on a perpetual preferred stock with a par value of $200, a…

A: Annual coupon = (9 / 100) * 200 = 18 Annual rate = (Annual coupon / price) * 100 Annual rate = (18 /…

Q: A firm has perpetual preferred stock outstanding with a par value of $10. The preferred stock pays…

A: Annual dividend =$2.80 Current stock price =$35

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A: Dividend yield is calculated to understand how much the company is paying out relative to its…

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Q: Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in…

A: The following information given in the question: 1. Price of both stock X and Y are same $25 2.…

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A: In the given question we need to compute the nominal rate of return on perpetual preferred stock.…

Q: Nick’s Enchiladas has preferred stock outstanding that pays a dividend of$5 at the end of each year.…

A: Calculation of stock's required rate of return:

Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…

A: Given details are : Par value = $100 Dividend rate = 8% Dividend amount = $100 * 8% = $8 Current…

Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…

A: Cost of preferred stock = (par value * Dividend rate ) / ( nominal rate of return )

Q: What is the required rate of return on a preferred stock with a $50 par value, a stated annual…

A: Computation:

Q: Kassidy's Kabob House has preferred stock outstanding that pays a dividend of $5 at the end of each…

A: Preferred Stock Dividend = $5Preferred Stock Price = $50 Calculation of Required Rate of Return per…

Q: If D1 = $1.25, g (which is constant) = 4.7%, and P0 = $42, what is the stock's expected dividend…

A: given, D1= $1.25 g= 4.7% P0 = $42

Q: Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock…

A: The interest rate before inflation is referred to as the nominal interest rate.

Q: please use Excel) Preferred stock B sells for $45 in the market and pays an annual dividend of…

A: Market price of share = $ 45 Annual dividend = $ 4.60

Q: What is the required rate of return on a preferred stock with a $50 par value, a stated annual…

A: Preferred stock is defined as the stock that generally pays the dividend at predetermined fixed…

Q: A stock that pays an annual dividend of $0.52 per share has a current price of $30.50. Find the…

A: Annual dividend = $0.52 Current price = $30.50

Q: Burnham & Company's $75 par value preferred stock pays an annual dividend of $11. The stock has a…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: A stock that pays an annual dividend of 0.60$ per share has a current price of 32.00$. Find the…

A: Dividend yield refers to the ratio of the annual dividend to the current share price. The dividend…

Q: A stock has a required rate of return of 14.36%, and it sells for $42.36 per share. The dividend is…

A: Share price (P0) = $ 42.36 Growth rate (g) = 4.4% Required return (r) = 14.36% Expected dividend =…

Q: a. Using the dividend discount model, what is the current market value of a stock (i.e., PO) that…

A: In this Question we requires to calculate the current market value of a Stock using dividend…

Q: Assume the return on large-company stocks is currently 11.5 percent. The risk premium on…

A: Return means get something form the investment. Return is directly (positively) relates with the…

Q: Which of the following statements is CORRECT? If a stock's dividend is expected to grow at a…

A: The fair value of a company is determined using the dividend growth model, a valuation method that…

Q: Preferred Stock Rate of Return What is the required rate of return on a preferred stock with a $50…

A: Calculation of dividend:

Q: Jones Design wishes to estimate the value of its outstanding preferred stock.  The preferred issue…

A:

Q: Diddy Corp. stock has a beta of 1.3, the current risk-free rate is 7 percent, and the expected…

A: Given: Risk free rate = 7% Beta = 1.3 Market return = 12.50%

Q: What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a…

A: Nominal rate of return (r) refers to the current dividend yield of an instrument. Dividend yield =…

Q: Honeywag common stock is expected to pay $1.85 in dividends next year, and the market price is…

A: Next year dividend (D1) = $ 1.85 Next year price (P1) = $ 42.50 Required rate of return (r) = 11%

Q: What is the value of a preferred stock

A: Preferred stocks is a type of equity. The holders of preferred stock will get preference over common…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.