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PETRONAS preferred stock pays PKR 10 dividend every year and the next dividend is due in one year. Using your intuition for the required return (justify your assumption) for the preferred stock, calculate: a) What is current market price? b) What will the price be immediately after the next dividend payment if the required rate of return does not change?

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The Weatherfield Way Construction Company has common and preferred stock outstanding. The preferred stock pays an annual dividend of $7.50 per share, and the required rate of return for similar preferred stocks is 11%. The common stock paid a dividend of $3.00 per share last year, but the company expected that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13%

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