Homework Answers
| Stock price = 53.50 |
| Required return = 13.0% |
| Total return required to earn 13% return =53.5*(1+13%) = 60.455 |
| Dividend next year = 3.40 |
| Price at end of one year 60.46 - 3.40 = 57.055 |
| Growth rate required = (57.055 -53.50)/ 53.50 |
| Growth rate expected for company stock price = 6.64% |
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