The common stock of Sweet Treats is selling for $47.00 per share. The company is expected to have an annual dividend increase of 2.9 percent indefinitely and pay a dividend of $3.45 in one year. What is the total return on this stock?
The common stock of Eddie's Engines, Inc., sells for $45.08 a share. The stock is expected to pay a dividend of $3.50 per share next year. Eddie's has established a pattern of increasing their dividends by 5.6 percent annually and expects to continue doing so. What is the market rate of return on this stock?
a.Total return=(D1/Current price)+Growth rate
=(3.45/47)+0.029
=10.24%(Approx)
b.Market return=(D1/Current price)+Growth rate
=(3.5/45.08)+0.056
=13.36%(Approx).
The common stock of Sweet Treats is selling for $47.00 per share. The company is expected...