1. A common stock paid a dividend of $3.75 this year. It is expected to grow at 8% each year for the foreseeable future. Investors require an 11% return rate. What is the value of a share of this stock?
$135.00
$125.00
$22.50
$3.97
2. A preferred stock pays 3% on its par value of $200, and the required rate of return is 9%. What is the value of the preferred stock?
$60
$67
$200
$267