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Maggie has a bond and a stock with a combined value of $1,500. The bond makes annual coupons starting next year and has a coupon
Maggie has a bond and a stock with a combined value of $1,500. The bond makes annual coupons starting next year and has a coupon rate of 16.24%. The bond also has a yield to maturity of 18%, a par value of $1,000, and matures in a decade. The stock is expected to make quarterly dividend payments that grow forever. The first payment of $2 is expected in one year, and the rate of return is 20%. What is the quarterly growth rate of the stocks dividends?
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