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Posted by: Homeworkhelp
Price Quoted by Student: $2.5
Posted On: 2011-03-17 06:06:43
 
Question

B12. (Required return) What required return is implied by the constant growth model for a stock that is selling for $47.00 per share and is expected to pay a single cash dividend next year of$0.75, and whose growth in dividend payments is expected to be 1.5% per year forever?


Solutions
Return on common stock = (D1/ Po) + g Exp
Price $2.5
Attachment 1: B12 Required return.xls
Solution Posted By: Homeworkhelp    Posted on: 17-03-2011