Assume the information in Problem 2 and a price of $60. Furthermore, assume that the stockholder was

Question:

Assume the information in Problem 2 and a price of $60. Furthermore, assume that the stockholder was most unsure concerning the return on new investment. How much would return have to change before the security was fairly priced?
In Problem 2
Assume the next period's is $1, that stockholders require a 12% return, that new investment is expected to yield 14%, and that the retention rate is 50%.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...