Exercise.Stock.4.1

Question 3 - 225
Preferred products has issued preferred stock with an $8 annual dividend that will be paid in perpetuity.
a)      If the discount rate í 12%, at what price should the preferred sell?
b)     At what price should the stock sell 1 year from now?
c)      What is dividend yield, the capital gain yield, and the expected rate of return of the stock?

Question 11 - 226