Question
Problem 7-13 Constant-Growth Model (LO3) A stock sells for $20. The next dividend will be $3 per share. If the rate of return earned on
Problem 7-13 Constant-Growth Model (LO3)
| A stock sells for $20. The next dividend will be $3 per share. If the rate of return earned on reinvested funds is a constant 12% and the company reinvests 50% of earnings in the firm, what must be the discount rate? (Do not round intermediate calculations. Enter your answer as a whole percent.) |
| Discount rate | % |
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
12th Edition
1439044473, 978-1439044476
