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    Dividends & Stock Valuation

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    A company pays a dividend today of $4, and this dividend is expected to grow each year by 4%. The discount rate is 10%. What is the market price of the stock?

    A firm issued a preferred stock which matures in 30 years and carries a maturity value of $45. The dividend is $4 per year over the 30 year period. The current market discount rate for this stock is 8%. What is the value of the preferred share?

    A stock with a current price of $25 / share pays a current annual dividend of $2 which is expected to increase by 4% per year. What is the stock's capitalization rate?

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    Solution Preview

    A - Current price of stock = Expected Dividend / ( discount rate - grouwth rate)

    Current price ...

    Solution Summary

    The solution computes stock valution based on dividend in a given scenario.