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The Uptowner will pay an annual dividend of $3.26 a share next year with future dividends...

The Uptowner will pay an annual dividend of $3.26 a share next year with future dividends increasing by 2.8 percent annually. What is the market required rate of return if the stock is currently selling for $49.10 a share?

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Answer #1

Required return=(D1/Current price)+Growth rate

=(3.26/49.1)+0.028

which is equal to

=9.44%(Approx).

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