What is the return of a stock that trades $35, will pay a $0.75 dividend at...

Question

Question

What is the return of a stock that trades $35, will pay a $0.75 dividend at the end of the year, and grows at a rate of 12%?

- 14.14%

- 15.15%

-12.12%

-13.13%

-11.11%

business finance

Answer 1

Answer #1

D1/(ke-g) = $35.00 Price $0.75 D1 = 12.00% g [0.75/35 ke 2.14% required return = ke 14.14% [12%2.14%

Answer 2

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