AutoSave Off File Home Insert Draw 3 - Page Layout - Final exam V2 Formulas Data Review Protected View View Help Search PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. e. If you require an 8 percent return, should you invest in preferred stock from the f A15 * fx B C 1 Problem 1 (5 x 5 = 25 points) 2 Winkel Inc. has both common stock and preferred stock. 3 4 For common stock: E F G H 5 The company works with a 7 percent return on equity and retains 60 percent of its earnings for reinvestment purpose 5 It recently paid a dividend of $11.00 and the stock is currently selling for $327.00. , a. Calculate the growth rate of the dividends. b. Calculate the expected return for the common stock c. If you require a 10 percent return, should you invest in common stock from the firm? Explain briefly why (not). For preferred stock: The company's preferred stock sells for $1,432 per share in the capital markets. The annual dividend on the preferred stock is $72.50 per share (constant). d. Calculate the expected return for preferred stock. e. If you require an 8 percent return, should you invest in preferred stock from the firm? Explain briefly why (not). +