Question No 1:

Explain why preferred stock is considered to be a hybrid of equity and debt securities.

Question No 2:

The current stock price of Largent, Inc., is $44.72. If the required rate of return is 19 percent, what is the dividend paid by this fi rm if the dividend is not expected to grow in the future?

Question No 3:

Nyeil, Inc., is a consumer products fi rm that is growing at a constant rate of 6.5 percent. Th e firm's last dividend was $3.36. If the required rate of return is 18 percent, what is the market value of this stock if dividends grow at the same rate as the firm?

Question No 4:

Reco Corp. is expected to pay a dividend of $2.25 next year. Th e forecast for the stock price a year from now is $37.50. If the required rate of return is 14 percent, what is the current stock price? Assume constant growth

Question No 5:

X-Centric Energy Company has issued perpetual preferred stock with a stated (par) value of $100 and a dividend of 4.5 percent. If the required rate of return is 8.25 percent, what is the stock's current market price?