Calculate the price of each preferred share

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Reference no: EM132062750

1. Suppose XYZ Inc. has common shares outstanding. The firm just paid a dividend of $0.80 per share and future dividends are expected to grow at 6% per year, forever. Assuming investors require a 12% rate of return. Calculate the price of the stock. (Round to 2 decimals)

2. Chandan Inc. has some preferred stock outstanding, which is expected to pay a 7% dividend on a $100 par value. Assuming investors require a 5.5% rate of return on their investment, calculate the price of each preferred share. (Round to 2 decimals)

Reference no: EM132062750

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