A share of preferred stock with an annual dividend of $10 has an expected return of 2.5% annually. What is the current estimated price of the preferred stock? 4
You forecast a company's dividends for the next four years. In Year 1 , you expect to receive $1.00 in dividends. In Year 2 , you expect to receive $1.50 in dividends. In Year 3 , you expect to receive $2.00 in dividends. In Year 4 , you expect to receive $2.50. After Year 4 , dividends are expected to grow at 3%. The rate of return for similar risk common stock is 12%. What is the current value of this company's stock?