1) Assume? Evco, Inc. has a current stock price of $52.27 and will pay a $1.75 dividend in one? year; its equity cost of capital is 15%.
What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current? price?
We can expect Evco stock to sell for ....?$ ?(Round to the nearest? cent.)
2) Achi Corp. has preferred stock with an annual dividend of $3.16. If the required return on? Achi's preferred stock is 8.4%?, what is its? price? (Hint: For a preferred? stock, the dividend growth rate is? zero.)
?Achi's stock price will be .......?$. (Round to the nearest? cent.)