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1) Present value problems:

a) Shayne Inc. is expected to pay an annual dividend each year of $5.40 per share of common stock. The current rate of return investors require is 8.6%. Calculate the expected price of the common stock.

b) Hansen Inc. issued preferred stock at $10,000 with a 4.5% dividend. The current rate of return investors require is 8.2%. Calculate the expected price of the preferred stock.

c) Assume the U.S. begins issuing consols, a government security without a maturing date. Assume a consol has a face value of $50,000 and pays interest of 3.8%. Dr. Wee wants ta 6.8% return for this investment. Calculate the value of the consol to Dr. Wee.

d) Morrow Corp. is selling a product that it expects will generate cash flows of $1,200,000 every year. The company's required rate of return is 7.5%. Calculate the value of this product to Morrow Corp.

e) Liu Company has an offer from another firm to buy its Jia Juice product. Liu Company expects Jia Juice will continue to generate cash flows of $775,000 every year. Liu Company's required rate of return is 8.9%. Calculate the minimum price Liu Company would accept to sell Jia Juice.

Note: The problems are from one question. Please provide step-by-step answers and specify the formula used to answer each problem. For example, cite whether it is Present value of ordinary annuity case, or present value of annuity due, or future value of ordinary annuity, or future value of annuity due case, or a perpetuity case and their formulas appropriate to each case scenario.

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