Common stock required rate of return

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• Calculate value, dividend, required rate of return, dividend growth

  Preferred Stock B: Value = $78, Required Rate of Return = 24%, Dividend = ? Preferred Stock C: Value = $38.75, Dividend = $3, Required Rate of Return = ?

• How to Value Common Stock & Return Income

  First method: Present value of common stock= dividend/ required rate of return For example: Dividend= $ 10 per share Required rate of return=20% Present value of common stock= $10/20%=$50 per share.

• Cost of Equity with Flotation Costs

  So, Required rate of return=(Next dividend/(Price of stock-flotation cost per share))+growth rate Required rate of return=($2.275/($57.50-$2.875))+.06 Required rate of return=($2.275/$54.625)+.06 Required rate of return=0.0416+.06 Required rate

• Investement Valuation- Bonds, Common Stock, Preferred Stock

  **Repeat part c with required rates of return of 20% on the common stock, with anticipated constant growth rate changes to 12%.** As the denominator of the Gordon Growth Model becomes smaller-either from a larger required rate of return, or a larger

• Stock Dividend

  What is the required rate of return if value of the stock is 78.75?

• Require rate of return

  Answer: Given that, Weight of debt=30% Weight of preferred stock=20% Weight of common stock=50% Before tax cost of debt=10% Cost of preferred stock=11% Cost of common equity=18% Marginal tax rate=40% Hence, Required rate of return=30%*10%*(1

• Determining Stock Price and Equilibrium Expected Growth Rate

  Problem 2 A share of common stock just paid a dividend of $1.00 (D0 = $1.00). If the expected long-run growth rate for this stock is 5.4%, and if investors' required rate of return is 11.4%, what is the stock price?

• What is after-tax cost of debt? What is WACC?

  Assuming the risk-free rate is 3%, the expected return on the stock market is 12%, and the company's beta is 1.0, what is the required return for common stockholders (i.e., component cost of common stock)? d.

• Return on stocks

  The required return on Chapman Tech's stock is 11% and its dividend is expected to grow at a constant rate of 7% per year. - Rust Petroleum is expected to pay a $1.50 dividend at the end of the year.

• WACC and required return of common stock using the CAPM.

  397129 WACC and required return of common stock using the CAPM. Calculate the weighted average cost of capital (calculate using only pre-tax items). Also calculate the required return of common stock using Capital Asset Pricing Model.