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Common stock valueConstant growthMcCracken Roofing, Inc., common stock paid a dividend of $1.01 per share last year. The company expects earnings and dividends to grow
Common stock valueConstant growthMcCracken Roofing, Inc., common stock paid a dividend of $1.01 per share last year. The company expects earnings and dividends to grow at a rate of 8% per year for the foreseeable future.
a.What required rate of return for this stock would result in a price per share of $22?
b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $22?
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