D 1 ), has a stock price of $133 ( P 0 ), and a constant growth rate ( g ) of 7 percent A firm pays a $2 50 dividend at the end of year one ( a Compute the required rate of return ( K e ) (Do not round intermediate calculations Input your answer as a percent rounded to 2 decimal places ) Rate of return Indicate whether each of the following changes will increase or decrease the required rate of return ( K e ) (Each question is separate from the others That is, assume only one variable changes at a time ) No actual numbers are necessary b If the dividend payment increases Dividend yield ( D 1 P 0 ) Required rate of return ( K e ) c If the expected growth rate increases Required rate of return ( K e ) d If the stock price increases Dividend yield ( D 1 P 0 ) Required rate of return ( K e )

Question

D 1 ), has a stock price of $133 ( P 0 ), and a constant growth rate ( g ) of 7 percent  A firm pays a $2 50 dividend at the end of year one ( a  Compute the required rate of return ( K e )  (Do not round intermediate calculations  Input your answer as a percent rounded to 2 decimal places ) Rate of return   Indicate whether each of the following changes will increase or decrease the required rate of return ( K e )  (Each question is separate from the others  That is, assume only one variable changes at a time ) No actual numbers are necessary  b  If the dividend payment increases  Dividend yield ( D 1   P 0 ) Required rate of return ( K e ) c  If the expected growth rate increases  Required rate of return ( K e ) d  If the stock price increases  Dividend yield ( D 1   P 0 ) Required rate of return ( K e )

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A firm pays a $2.50 dividend at the end of year one (
a.	Compute the required rate of return (K_e). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Rate of return	%
Indicate whether each of the following changes will increase or decrease the required rate of return (K_e). (Each question is separate from the others. That is, assume only one variable changes at a time.) No actual numbers are necessary.
b.	If the dividend payment increases:

Dividend yield (D₁ / P₀)

Required rate of return (K_e)


c.	If the expected growth rate increases:

Required rate of return (K_e)


d.	If the stock price increases:

Dividend yield (D₁ / P₀)

Required rate of return (K_e)

Question

D 1 ), has a stock price of $133 ( P 0 ), and a constant growth rate ( g ) of 7 percent. A

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