Question
Computer stocks currently provide an expected rate of return of 17%. MBI, a large computer company, will pay a year-end dividend of $2.10 per share.
Computer stocks currently provide an expected rate of return of 17%. MBI, a large computer company, will pay a year-end dividend of $2.10 per share.
a. | If the stock is selling at $51 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Growth rate = ???%
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b-2. | What (qualitatively) will happen to the company's priceearnings ratio? | ||||
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