Information statements of a public firm benny

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You are given with the following information statements of a public firm Benny in the airline industry concurrently. (Notice that all negative numbers are parenthesized). The firm has issued 12 million shares of common stock with current market price as $55/per share, the expected dividend is $6.90/per share with 3.2% growth rate, 300,000 shares of preferred stocks with promised preferred dividend and preferred stock price as $3.20/per share and $14.5/per share, respectively. The firm also has currently, 2 million 4.2%-coupon bonds with $1,000 face value that pays the coupons semi-annually. The current bond price is $820/per bond. The bonds are expected to mature at 2025. Answer the following questions:

a) If using the market prices for assessment on rates of return, what is the rate of return the common stock of Benny? What is the rate of return for their preferred stocks?

Reference no: EM131721634

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