1. Pffender Guitars has a current annual cash dividend policy of $4.00. The price of the stock is set to yield an 8% return. What is the price of this stock if the dividend will be paid.
B) For 15 years, purchasing stock for 25?
F) Forever with no repurchase of stock?
2. King waterbed has an annual cash dividend policy that raises the dividend each year by 4%. Last years divided was $.40 per share. What is the stock price if
A) An investor wants a 5% return?
C) an investor wants a 10% return
3. Sia Dance Studio has an annual cash dividend policy that raises the dividend each year by 2%. Last year dividend was $3 per share. The company will be in business for 40 years with no liquidating dividend.
A) an investor wants a 9% return?
D) an investor wants a 25 return?
4. Fenway athletic club plans to offer its members preferred stock with a par value of $100 and a 6% annual dividend rate. What price should these members be willing to pay for the returns they want?
A) Terry wants a 18% return