Question
Common stock valuelong -Constant growthMcCracken Roofing, Inc., common stock paid a dividend of $1.43 per share last year. The company expects earnings and dividends to
Common stock valuelong -Constant growthMcCracken Roofing, Inc., common stock paid a dividend of $1.43 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 12%, what required rate of return would result in a price per share of $22?
a. The required rate of return for this stock, in order to result in a price per share of $22is $_______%.
(Round to two decimal places.)
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