MT/217 MT217 MT 217 Unit 10 Lab assignment

MT 217 Unit 10 Lab assignment 

Unit 10 Assignment( Q+A)

Question 1

You just purchased preferred shares in Initech for​ $45.71. Initech pays annual dividends of​ $0.64. What is your required return on this​ investment?

Question 2

If​ Genco's preferred stock pays a dividend of​ $5 per share and its investors require an​ 8% return, what should its price per share of preferred stock​ be?

Question 3

Coors just paid out a dividend of​ $1.00 on its common​ stock, which is currently trading at​ $37.27. If dividends are paid annually and are expected to grow in value by​ 1% per annum​ forever, then what return will a shareholder earn if the stock is purchased​ today?

Question 4

Cherry Auto Sales just opened and does not expect to pay a dividend during its first year. At the end of its second​ year, Cherry's owners expect to pay a​ $2.00 dividend and plan to increase it​ 7% annually. If the required return is​ 20%, what should​ Cherry's stock price​ be?

Question 5

Mammoth​ Mart's common shares are currently trading for​ $59.85 and the company paid its annual dividend of​ $0.60 per share. If your required rate of return is​ 12%, what is the implied growth rate in​ dividends? (Assuming that dividends are expected to grow at a constant rate in​ perpetuity.)

Question 6

A share of common stock has a current price of​ $82.50 and is expected to grow at a constant rate of 10 percent. If you require a​ 14% rate of​ return, what is the current dividend of this​ stock?

Question 7

If the last dividend on Markowitz Trucking stock was​ $2 per share and if dividends are expected to grow​ 10% annually, what is the share price if the required return is​ 12%?

Question 8

Berg Inc. has just paid a dividend of​ $2. Its stock in now selling for​ $48 per share. The firm is half as risky as the market. The expected return on the market is​ 14%, and the yield on U.S. Treasury bonds is​ 11%. If the market is in​ equilibrium, what rate of growth is​ expected?

Question 9

The last dividend paid on Minsky Corp. stock was​ $3 per share. If Minsky investors require a​ 10% return, what should the share price be if the dividend payments are not expected to​ change?

Question 9

The last dividend paid on Minsky Corp. stock was​ $3 per share. If Minsky investors require a​ 10% return, what should the share price be if the dividend payments are not expected to​ change?