Question
Suppose a company just paid dividend of $6.35. The dividend is expected to grow at 7.99% each year. If the stock is currently selling for
- Suppose a company just paid dividend of $6.35. The dividend is expected to grow at 7.99% each year. If the stock is currently selling for $121.12, what is the required rate of return on the stock?
2.Suppose a company is expected to pay dividend of $4.5 next year. The dividend is expected to grow at 10.88% each year. If the stock is currently selling for $159.39. what is the requires rate of return on the stock?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the required rate of return or the cost of equity on a stock we can use the Gordon Grow...
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Step: 3
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
