Rand Co. has preferred stock trading at $45 per share and with a par value of...

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Rand Co. has preferred stock trading at $45 per share and with a par value of $50. The shares pay a 10% dividend. What is Rand's cost of capital for preferred stock? Problem 4 (4 marks) Sutherland Company's stock has a beta of 0.20. If the risk-free rate is 6% and the market risk premium is 7%, what is an estimate of Sutherland Company's cost of equity? Problem 5 (4 marks) Lloyd Company has a stock price of $20. The firm will pay a dividend next year of $1, and its dividend is expected to grow at a rate of 4% per year thereafter. What is your estimate of Lloyd's cost of equity capital? Rand Co. has preferred stock trading at $45 per share and with a par value of $50. The shares pay a 10% dividend. What is Rand's cost of capital for preferred stock? Problem 4 (4 marks) Sutherland Company's stock has a beta of 0.20. If the risk-free rate is 6% and the market risk premium is 7%, what is an estimate of Sutherland Company's cost of equity? Problem 5 (4 marks) Lloyd Company has a stock price of $20. The firm will pay a dividend next year of $1, and its dividend is expected to grow at a rate of 4% per year thereafter. What is your estimate of Lloyd's cost of equity capital?

Answer rating: 100% (QA)

To calculate Rand Cos cost of capital for preferred stock we can use the dividend yield formula The ... View the full answer