majohn5
May 29, 2009, 04:42 PM
Can someone please help me with these questions?
Analogue Technology has preferred stock outstanding that pays a $9 annual dividend. It has a price of $76. What is the required rate of return (yield) on the preferred stock?
Yield = Dividend/Price
=9/76=11.84%
A firm pays a $4.90 dividend at the end of year one (D1), has a stock price of $70, and a constant growth rate (g) of 6 percent. Compute the required rate of return.
Po=D1/Ke-g 4.90/70 -.06 = 4.90/69.94 = 0.07006
Analogue Technology has preferred stock outstanding that pays a $9 annual dividend. It has a price of $76. What is the required rate of return (yield) on the preferred stock?
Yield = Dividend/Price
=9/76=11.84%
A firm pays a $4.90 dividend at the end of year one (D1), has a stock price of $70, and a constant growth rate (g) of 6 percent. Compute the required rate of return.
Po=D1/Ke-g 4.90/70 -.06 = 4.90/69.94 = 0.07006