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Eastern Cement Company has a (10+5)% preferred stock issued outstanding, with each share having Tk....

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Finance

Eastern Cement Company has a (10+5)% preferred stock issued outstanding, with each share having Tk. 1,000 face value. Currently the market price of the stock is Tk. 1,800. What is the percentage of yield of the stock?

b. The Didar Company currently pays a dividend of 5% per share on its face value of Tk. 100 and has market price of Tk. 120 per share. The growth rate is expected to grow at a constant rate forever. If the firms expected return on equity is (5+5)%, what is its growth rate?

c. At present, a company pays a dividend of Tk. 4.50 per share on its common stock. The company expects to increase the dividend at 13% annual rate for the first three years and at a 14% rate for the next two years, and then grow the dividend at a 12% rate forever. This growth pattern is in keeping the expected life cycle of earning. The yield of the investors to invest in this stock is (14+5)%. What value should an investor place on a share of this stock?

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