28. A preferred stock will pay a dividend of $3.00 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 9% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $33.33 B. $0.27 C. $31.82 D. $56.25 E. None of these is correct 3.00/.09 = 33.33 29. A preferred stock will pay a dividend of $1.25 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 12% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $11.56 B. $9.65 C. $11.82 D. $10.42 E. None of these is correct 1.25/.12 = 10.42 30. A preferred stock will pay a dividend of $3.50 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 11% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $0.39 B. $0.56 C. $31.82 D. $56.25 E. None of these is correct 3.50/.11 = 31.82 31. A preferred stock will pay a dividend of $7.50 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 10% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $0.75 B. $7.50 C. $64.12 D. $56.25 E. None of these is correct 7.50/.10 = 75.00
28. A preferred stock will pay a dividend of $3.00 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 9% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $33.33 B. $0.27 C. $31.82 D. $56.25 E. None of these is correct 3.00/.09 = 33.33 29. A preferred stock will pay a dividend of $1.25 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 12% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $11.56 B. $9.65 C. $11.82 D. $10.42 E. None of these is correct 1.25/.12 = 10.42 30. A preferred stock will pay a dividend of $3.50 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 11% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $0.39 B. $0.56 C. $31.82 D. $56.25 E. None of these is correct 3.50/.11 = 31.82 31. A preferred stock will pay a dividend of $7.50 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 10% on this stock. Use the constant growth DDM to calculate the intrinsic value of this preferred stock. A. $0.75 B. $7.50 C. $64.12 D. $56.25 E. None of these is correct 7.50/.10 = 75.00
Ch18%20Equity%20Valuation%20Models.docx