Last year, LPL Corporation's common stock paid $3.33 in dividends (D0). The company expects its dividends...
Last year, LPL Corporation's common stock paid $3.33 in dividends (D0). The company expects its dividends to grow by 7.36%. The current price of LPL Corporation's common stock is $34.33.
Calculate the stock's expected rate of return.
Homework Answers
Expected rate of return = [D0(1 + g) / P0] + g
Expected rate of return = [$3.33(1.0736) / $34.33] + 0.0736
Expected rate of return = 0.1777 or 17.77%
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