The stock price of Alps Co. is $67. Investors require a return of 10.5 percent on similar stocks. If the company plans to pay a dividend of $4.25 next year, what growth rate is expected for the company’s stock price? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Required rate=(D1/current price)+growth rate
0.105=(4.25/67)+growth rate
Growth rate=0.105-(4.25/67)
=4.16%(approx).
The stock price of Alps Co. is $67. Investors require a return of 10.5 percent on...