1.What is the value of a preferred stock that is expected to pay a $5.00 annual dividend per year forever if similar risk securities are now yielding 8 percent?

A)   $40.00.

B)   $60.00.

C)   $80.00.

D)   $62.50.

2.A company has 6 percent preferred stock outstanding with a par value of $100. The required return on the preferred is 8 percent. What is the value of the preferred stock?

A)   $100.00.

B)   $92.59.

C)   $94.34.

D)   $75.00.

3.A company has 8 percent preferred stock outstanding with a par value of $100. The required return on the preferred is 5 percent. What is the value of the preferred stock?

A)   $100.00.

B)   $152.81.

C)   $160.00.

D)   $62.50.

4.The preferred stock of the Delco Investments Company has a par value of $150 and a dividend of $11.50. A shareholder’s required return on this stock is 14%. What is the maximum price he would pay?

A)   $82.14.

B)   $150.00.

C)   $54.76.

D)   $54.79.

5.If a preferred stock that pays a $11.50 dividend is trading at $88.46, what is the market’s required rate of return for this security?

A)   7.69%.

B)   13.00%.

C)   11.76%.

D)   10.00%.

答案和详解如下：

1.What is the value of a preferred stock that is expected to pay a $5.00 annual dividend per year forever if similar risk securities are now yielding 8 percent?

A)   $40.00.

B)   $60.00.

C)   $80.00.

D)   $62.50.

The correct answer was D)

$5.00/.08 = $62.50.

2.A company has 6 percent preferred stock outstanding with a par value of $100. The required return on the preferred is 8 percent. What is the value of the preferred stock?

A)   $100.00.

B)   $92.59.

C)   $94.34.

D)   $75.00.

The correct answer was D)

The annual dividend on the preferred is $100(.06) = $6.00. The value of the preferred is $6.00/0.08 = $75.00.

3.A company has 8 percent preferred stock outstanding with a par value of $100. The required return on the preferred is 5 percent. What is the value of the preferred stock?

A)   $100.00.

B)   $152.81.

C)   $160.00.

D)   $62.50.

The correct answer was C)

The annual dividend on the preferred is $100(.08) = $8.00. The value of the preferred is $8.00/0.05 = $160.00.

4.The preferred stock of the Delco Investments Company has a par value of $150 and a dividend of $11.50. A shareholder’s required return on this stock is 14%. What is the maximum price he would pay?

A)   $82.14.

B)   $150.00.

C)   $54.76.

D)   $54.79.

The correct answer was A)

Value of preferred = D / kp = $11.50 / 0.14 = $82.14

5.If a preferred stock that pays a $11.50 dividend is trading at $88.46, what is the market’s required rate of return for this security?

A)   7.69%.

B)   13.00%.

C)   11.76%.

D)   10.00%.

The correct answer was B)   

From the formula: ValuePreferred Stock = D / kp, we derive kp = D / ValuePreferred Stock = 11.50 / 88.46 = 0.1300, or 13.00%.