QUESTION 2 What are common stocks ? Elaborate their main characteristics OR After successfully earning returns in the bond market , Sarah is now considering a much riskier investment . She is considering the valuation of a share of ADNOC common stock that paid a 2 AED dividend at the end of last year and is expected to pay a cash dividend every year from now to infinity Each year the dividend payout ratio ( D1 / E1 ) is expected to be 5 % and the return on equity earned when the firm reinvests a portion of its earnings back into the firm ( ROE ) is 10.53 % . Based on an assessment of the riskiness of the common stock , the investor's required rate of return is 15 percent . What is the value of this ADNOC common stock ? For the toolbar , press ALT + F10 ( PC ) or ALT + FN + F10 ( Mac ) i T A h Q 10pt Arial

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