Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What should be the yearly rate of return on the share if the current price is 50$, the expected dividend paid in the incoming year

What should be the yearly rate of return on the share if the current price is 50$, the expected dividend paid in the incoming year is 2.8 $, the constant growth rate of net profit of the company is assumed to be 5% yearly (to infinity) and every year 80% of this growth will increase the dividend.

Wybierz jedną odpowiedź:

a.

9.6%

b.

9.824%

c.

10.6%

d.

10.88%

Step by Step Solution

3.42 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

Rate of return Dividend x 100 Price Growth rat... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Financial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds

9th edition

9781259296802, 9781259296758, 78025907, 1259296806, 9781259296765, 978-0078025907

More Books

Students also viewed these Accounting questions

Question

How does the concept of hegemony relate to culture?

Answered: 1 week ago