5)Why would a preferred stockholder want the stock to have a cumulative dividendfeature and protective provisions?

6) The common stockholders receive two types of returns from their investments, what are they?

7)What is the value of preferred stock when the dividend rate is 13% on a $100 par value? The appropriate discount rate for a stock of this risk level is 12.5%.Look at valuation for preferred stock

8) The preferred stock ofYou Corp pays a $3.75 dividend. What is the value of the stock of your required return is 8.5%?Look at valuation for preferred stock

9) You are looking to invest in a company that has 10.5% return on equity and retains 60% of its earnings for reinvestment purposes. The company recently paid a dividend of $3.75 and the stock is currently selling for $45.Look at valuation for common stock

A) What is the growth rate of the company?

B) What is the expected return on the company's stock?

C) If you REQUIRE a 13 percent return, should you invest in this firm?

10) You own 230 shares of Candy Landstock preferred stock which currently sells for $39.75per share and pays annual dividends of $3.35.

A) What is your expected return?

B) If you require 8 percent return, given the current price, should you buy more stock?

11) The common stock for CardiInc,. is selling for $35.78per share. The stock recently paid dividends of $2.79per share and has a projected constant growth rate of 7percent. If you purchasethe stock at market price, what is your expected rate of return?