Question
You buy a constant growth stock today for $100. It pays a dividend in year 1 of $5 and grows at 10 percent per year.
You buy a constant growth stock today for $100. It pays a dividend in year 1 of $5 and grows at 10 percent per year. Draw a cashflow diagram for the stock if you sell it at the end of year 2. What is your average return on the stock over the two years?
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Financial Accounting Introduction To Concepts Methods And Uses
Authors: Clyde P. Stickney, Roman L. Weil
11th Edition
0324222971, 978-0324222975
