Quantitative Problem 1: Hubbard Industries just paid a common dividend, Do, of $
ID: 2821580 • Letter: Q
Question
Quantitative Problem 1: Hubbard Industries just paid a common dividend, Do, of $1 of 4% per year. If investors require answer to the nearest cent. Do not round intermediate calculations. .70. It expects to grow at a constant rate Round your a 10% return on equity, what is the current price of Hubbard's common stock? per share Show All Feedbaclk Zero Growth Stocks: The constant growth model is sufficiently general to handle the case of a zero growth st remain constant over time. In this situation, the equation is: is the same equation developed in Chapter 5 to value a perpetuity, and it is the same equation used to value a Note that this perpetual preferred stock that entitles its owners to regular, fixed dividend payments in perpetuity. The valuation equation is simply the current dividend divided by the required rate of return. Quantitative Problem 2: Carlysle Corporation has perpetual preferred stock outstanding vat pays a constant annual dividend of $1.30 at the end of each year. If investors require an 9% return on the preferred stock t is the price of the firm's perpetual preferred stock? Round your answer to the nearest cent. Do not round intermedlculations 3 per shareExplanation / Answer
1)
current price of the stock
=(D0*(1+g))/(r-g)
=(1.70*(1+4%))/(10%-4%)
=29.47
the above is answer..
we do only one question based on Chegg rule