Question
The stock price of XYZ Co. is $20.87. Investors require an 7.49 percent rate of return on similar stocks. If the company plans to pay
The stock price of XYZ Co. is $20.87. Investors require an 7.49 percent rate of return on similar stocks. If the company plans to pay a dividend of $1.35 next year, what constant growth rate (in percent) is expected for the company's stock price?
The answer I got is 1.02. Is this correct?
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Introduction To Mathematical Finance Discrete Time Models
Authors: Stanley R. Pliska
1st Edition
1557869456, 9781557869456
