Preferred stock is expected to pay a dividend

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Reference no: EM131346463

1. Jones Company preferred stock is expected to pay a dividend of $1.75 per share. If your required rate of return is 7%, what is the most that you should be willing to pay for a share of Jones’ preferred stock today?

A) $25.00

B) $17.50

C) $1.87

D) $26.88

2. Apple, Inc. just paid a dividend of $2.75 a share. Dividends are expected to grow at a rate of 8% per year for the next four years and then at a rate of 3% thereafter. If your required rate of return is 6%, what is the most that you should be willing to pay for a share of Apple stock today?

A) $107.16

B) $113.24

C) $130.85

D) $134.31

Reference no: EM131346463

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