You are trying to calculate the value of a preferred stock you are examining. This preferred stock has an annual dividend of $5 per share and a par value of $30. If the required return on this stock is currently 20 percent, what should be the stock's market value?
The common stock of Ladeso Inc. has a beta of 1.20. The risk-free rate is 5 percent and the market risk premium is 6 percent. What is the company's cost of common stock using the CAPM approach?