hw4 4

(Common stock valuation) Dubai Metro's stock price was at $90 per share when it announced that it will cut its dividend for next year from $8 per share to $4 per share, with additional funds used for expansion. Prior to the dividend cut, Dubai Metro expected its dividends to grow at a 7 percent rate, but with the expansion, dividends are now expected to grow at 10 percent. How do you think the announcement will affect Dubai Metro's stock price? a. What is the investor's required rate of return for Dubai Metro's stock? % (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer 2 parts remaining clear All Che