# AMAZON: Evaluate the following in a 525-word response: Characteristics of common and preferred stock. How stock markets work.

Assignment Content

Purpose of Assignment

The purpose of this assignment is to allow students the opportunity to practice stock valuation problems and to locate financial information on the Internet, which can be used to expand their knowledge of how stocks behave.

Assignment Steps

Resources: Stock Valuation Template

Calculate the following stock valuation problems:

Company AMAZON is paying an annual dividend of \$1.35 and has decided to pay the same amount forever. How much should you pay for the stock, if you want to earn an annual rate of return of 9.5% on this investment?
You want to purchase common stock of Company X and hold it for 7 years. The company just announced they will be paying an annual cash dividend of \$6.00 per share for the next 9 years. How much should you pay for the stock, if you will be able to sell the stock for \$28 at the end of seven years and you want to earn an annual rate of return of 11% on this investment?

Select one of the companies studied by one of the group members in Week 3.

Search the Internet for financial information about the company selected.

Evaluate the following in a 525-word response:

Characteristics of common and preferred stock.
How stock markets work.
The connection between the value of shares and dividends.
Mention the ticker symbol of the company studied, the current price of the stock, and its financial history.
Indicate if you would recommend investing in this stock and why. Explain.
Format your paper consistent with APA guidelines.

Note: Grades are awarded based upon individual contributions to the Learning Team assignment. Each Learning Team member receives a grade based upon his/her contributions to the team assignment. Not all students may receive the same grade for the team assignment.

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