Question
A's stock pays a dividend once each year, and it just paid a dividend of $0.85 yesterday. The current market price of the stock is
A's stock pays a dividend once each year, and it just paid a dividend of $0.85 yesterday. The current market price of the stock is $12.14. If investors believe that A will increase its dividends by 7 percent per year forever, what is the required rate of return on A's stock?
Required
Calculate the required rate of return.
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
9th Edition
73530700, 978-0073530703
