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    Made-It, Pioneer

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    1) Made-It common stock currently sells for $22.50 per share. The company's executives anticipate a constant growth rate of 10 percent and an end of year dividend of $2.

    A) What is your expected rate of return if you buy the stock for $22.50.
    B) If you require a a 17 percent return, should you purchase the stock?

    2) Pioneer preferred stock is selling for $33 per share in the market and pays a $3.60 annual dividend.

    A) What is the expected rate of return on the stock.
    B) If your required rate of return is 10 percent , what is the value of the stock for you.
    C) Should you acquire the stock.

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    Solution Preview

    Financial management
    1) Made-It common stock currently sells for $22.50 per share. The company's executives anticipate a constant growth rate of 10 percent and an end of year dividend of $2.

    A) What is your expected rate of return if you buy the stock for $22.50?

    P = D1 where D1 is ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer the financial management questions.

    $2.49

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