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- When treasury stock is purchased for cash at more than its par value, what is the effect on total shareholders equity under each of the following methods?The cost of preferred stock: a. is equal to the dividend yield b. is independent of the stock's price c. is equal to the YTM d. depends on dividend's growth raten the formula ke >= (D1/P0) + g, what does (D1/P0) represent? Select one: a. The expected capital gains yield from a common stock b. The interest payment from a bond c. The expected dividend yield from a common stock d. The dividend yield from a preferred stock
- A stock has a dividend yield of 2.85% and a capital gains yield of 6.93%. What is the stock's required return?A preferred stock recently paid a $0.82 dividend, and the required rate of return is 12%. Which of the following calculates the intrinsic value of this stock in cell B3?An index consists of the following securities. What is the value-weighted index return? Value-weighted Stock Shares Outstanding Beginning Share Price Ending Share Price L 4,000 $ 18 $ 26 M 3,000 $ 35 $ 41 Multiple Choice 22.03% 22.85% 25.25% 28.25% 30.00%
- What is the required return on preferred stock, rPS, if the stock has an annual dividend of $9 and a price of $100?Use the following data for the Sara Company to calculate the cost of common stocks (Rs), the cost of Preferred stocks (Rps), and the cost of Debt: (Rd)? Item Symbol Value Risk Free Rate Rf 7% Stock Risk B 1.5 Market Return Rm 25% Interest Rate for Debt Rd (B.T) 9% TAX rate T 5% Preferred Stock Dividend D(ps) 10 Preferred Stock Price P(ps) 100 floatation cost ps FC $4 The cost of Preferred stocks: (Rps)? The cost of Debt: (Rd)?An analyst gathers the following information about a company and the market: Current market price per share of common stock €38.00 Most recent dividend per share paid on common stock €2.50 Expected dividend payout rate 30% Expected return on equity (ROE) 12% Beta for the common stock 1.5 Expected return on the market portfolio 12% Risk-free rate of return 4% Using the dividend discount model approach, the cost of common equity for the company is closest to:
- What equation was used to get this? Common Stock Share price 65 Dividends 2.53 Growth rate 9% Riskfree Rate 7% Market Risk Premium 5.50% Beta 1.2 Cost of common stock(using DGM) 13.24% Cost of common stock(using CAPM) 13.60% Cost of common Equity 13.42%Using the equity asset valuation model (CAPM) equation, determine the required return for the shares of the following companies, if the market return is 7.50% (Rm = 7.50%) and the risk-free asset return is 1.25% (RF = 1.25%). You must show all counts. Stock Beta SKT 0.65 COST 0.90 SU 1.42 AMZN 1.57 V 0.94Given the information in the table, if the stock has a required return of 12.6%, what is the value of the stock?
