What is the value of the preferred stock

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Reference no: EM131347173

1. A common stock paid a dividend of $3.75 this year. It is expected to grow at 8% each year for the foreseeable future. Investors require an 11% return rate. What is the value of a share of this stock?

$135.00

$125.00

$22.50

$3.97

2. A preferred stock pays 3% on its par value of $200, and the required rate of return is 9%. What is the value of the preferred stock?

$60

$67

$200

$267

Reference no: EM131347173

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