Homework

Part $1$ of $2$

Points: $0$ of $1$

Common stock value $-$ Constant growth McCracken Roofing, Inc., common stock paid a dividend of $$1\mathrm{.}17$ per share last year. The company expects eamings 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 $$30?$

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 $$30?$