Stock and market values
Thompson Inc plans to issue preferred stock with a perpetual annual dividend of $2 per share and a par value of $25. If the required return on this stock is currently 8%, what should be the stock?s market value?
Companies A and B each reported the same earnings per share (EPS), but Company J?s stock trades at a higher price. Which of the following statements is correct?
a. Company A must have a higher P/E ratio.
b. Company A must have a higher market-to-book ratio.
c. Company A must be riskier.
d. Company A must have fewer growth opportunities.
e. Company A must pay a lower dividend
Stock and market values are determined.
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