Question
ABC will pay a year-end dividend of $2.50 per share. Investors expect the dividend to grow at a rate of 4 percent indefinitely. a- If
ABC will pay a year-end dividend of $2.50 per share. Investors expect the dividend to grow at a rate of 4 percent indefinitely. a- If the stock currently sells for $25 per share, what is the expected rate of
return on the stock?
[05 points]
b- If the expected rate of return on the stock is 16.5 percent, what is the stock price?
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
3rd Edition
0471375942, 978-0471375944
