Question
Problem 7-6 Rate of Return (LO2, 3) Steady As She Goes, Inc., will pay a year-end dividend of $5.15 per share. Investors expect the dividend
Problem 7-6 Rate of Return (LO2, 3)
| Steady As She Goes, Inc., will pay a year-end dividend of $5.15 per share. Investors expect the dividend to grow at a rate of 18.9% indefinitely. |
| a. | If the stock currently sells for $40.87 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations.) |
| Expected rate of return | % |
| b. | If the expected rate of return on the stock is 30.07%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Stock price | $ |
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Information Quality Assurance And Internal Control For Management Decision Making
Authors: William R Kinney
1st Edition
0256221618, 9780256221619
