Southwest Bankcorp Preference Shares Are Selling at $54 on the Market

question 91

Essay

Southwest Bankcorp preference shares are selling at $54 on the market and pay an annual dividend of $4.20 per share.
a.What is the expected rate of return on the share?
b.If an investor's required rate of return is 9%,what is the value of the share for that investor?
c.Considering the investor's required rate of return,does this share seem to be a desirable investment?

---

Definitions:

Union Membership

The status of being a member of a labor union, which represents workers in specific industries or occupations.

Collective Bargaining Agreement

A legally binding contract between an employer and a group of employees (often represented by a union) that outlines wages, hours, and working conditions.

Union Bylaws

written rules and regulations governing the operation and management of a labor union, including membership requirements, officer duties, and meeting protocols.

Union Avoidance

Strategies and practices employed by employers to discourage workers from joining or forming unions.