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Posted by: Homeworkhelp
Price Quoted by Student: $2.5
Posted On: 2011-03-17 06:06:40

Expected dividend growth rate. Suppose that MTA is expected to pay $4.00 in cash dividends next year at the rate of $1.00 per quarter and that the required return on MTA stock is 14%. If MTA is currently selling for $37.50 per share, what is the expected growth rate in dividends for MTA based on the constant growth model?


B13. (Expected dividend growth rate)

Return on common stock = (D1/ Po) + g
Price $2.5
Attachment 1: B13 Expected dividend growth rate.xls
Solution Posted By: Homeworkhelp    Posted on: 17-03-2011