1. What is the required rate of return on a preferred stock with a $49 par value, an annual dividend of 7% of par, and a current market price of 1) $30, 2) $45, 3) $55 and 4) $75 ?
2. A Co. is expected to pay a $ 1.25 per share dividend at the end of this year. The dividend is expected to grow at a constant rate of 7% per year. The required rate of return on the stock is 11.5%. What is the estimated value per share of the stock ?
3. Suppose that 1 Euro could be purchased in the foreign exchange market today for $0.25. If the Euro appreciated 10 percent tomorrow against the dollar, how many Euros would a dollar buy tomorrow?