Question

In: Finance

ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it...

ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it pays a dividend of $5 each year. What is the required rate of return on this stock, if the next dividend is going to be paid tomorrow? What if the most recent dividend was paid yesterday?

Solutions

Expert Solution

Required rate on preferred stock = Annual Dividend/Price

Required rate = 5/100

Required rate = 5.00%

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it...
ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it pays a dividend of $5 each year. What is the required rate of return on this stock, if the next dividend is going to be paid tomorrow? What if the most recent dividend was paid yesterday?
Ret has 100 million shares outstanding, a current share price of $25, and no debt. Rets...
Ret has 100 million shares outstanding, a current share price of $25, and no debt. Rets management believes that the shares are underpriced, and that the true value is $30 per share. Ret plans to pay $250 million in cash to its shareholders by repurchasing shares. Management expects that very soon new information will come out that will cause investors to revise their opinion of the firm and agree with Ret assessment of the firm's true value. Assume that Ret...
Hawkins Lab and Tech is a firm with 100 million shares outstanding. Current share price is...
Hawkins Lab and Tech is a firm with 100 million shares outstanding. Current share price is $20/share. The firm has $1,000 mm in debt outstanding, $500 mm in excess cash and 20 million employee stock options. The value of the options is $5/share. Assuming the firm is fairly priced, what is the estimated value of the firm’s operating assets.
Hawkins Lab and Tech is a firm with 100 million shares outstanding. Current share price is...
Hawkins Lab and Tech is a firm with 100 million shares outstanding. Current share price is $20/share. The firm has $1,000 mm in debt outstanding, $500 mm in excess cash and 20 million employee stock options. The value of the options is $5/share. Assuming the firm is fairly priced, what is the estimated value of the firm’s operating assets.
AAA and ZZZ are all-equity firms. AAA has 530 shares outstanding at a market price of...
AAA and ZZZ are all-equity firms. AAA has 530 shares outstanding at a market price of $101 a share. ZZZ has 200 shares outstanding at a price of $17 a share. ZZZ is acquiring AAA for $7,000 in cash. The incremental value of the acquisition is $8,000. What is the net present value of acquiring AAA to ZZZ? You purchase a call option on Belarus rubles for a premium of $.10 per unit, with an exercise price of $2.48. The...
Acort Industries has 11 million shares outstanding and a current share price of $45 per share....
Acort Industries has 11 million shares outstanding and a current share price of $45 per share. It also has​ long-term debt outstanding. This debt is risk​ free, is four years away from​ maturity, has an annual coupon rate of 10%​, and has a $120 million face value. The first of the remaining coupon payments will be due in exactly one year. The riskless interest rates for all maturities are constant at 6%. Acort has EBIT of $106 ​million, which is...
Harbin Manufacturing has 10 million shares outstanding with a current share price of $24.07 per share....
Harbin Manufacturing has 10 million shares outstanding with a current share price of $24.07 per share. In one​ year, the share price is equally likely to be $30 or $20. The​ risk-free interest rate is 6%. a. Using the​ risk-neutral probabilities, what is the value of a​ one-year call option on Harbin stock with a strike price of $25​? b. What is the expected return of the call​ option? c. Using the​ risk-neutral probabilities, what is the value of a​...
A company has 7,054,129 shares of common stock outstanding. The current share price is $58.26, and...
A company has 7,054,129 shares of common stock outstanding. The current share price is $58.26, and the book value per share is $3.77. This company also has two bond issues outstanding. The first bond issue has a face value of $41,975,487, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $55,010,588, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....
A company has 4,900,331 shares of common stock outstanding. The current share price is $73, and...
A company has 4,900,331 shares of common stock outstanding. The current share price is $73, and the book value per share is $4.85. This company also has two bond issues outstanding. The first bond issue has a face value of $60,094,653, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $63,040,210, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....
XYZ has 9 million shares of stock outstanding. The current share price is $50, and the...
XYZ has 9 million shares of stock outstanding. The current share price is $50, and the book value per share is $6. The firm also has two bond issues outstanding. The first bond issue has a face value of $70 million and an 8% annual coupon; it sells for 95% of par. The second bond has a face value of $60 million and a 7% annual coupon; it sells for 97% of par. The first bond matures in 10 years,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT