The next dividend that will be paid on your stock is expected to be $2.15. Dividends...
The next dividend that will be paid on your stock is expected to be $2.15. Dividends grow at a constant rate of 6.5%. If the stock is currently selling for $71, calculate the expected return on this stock based on the constant growth model.
Homework Answers
| Expected return | = | (D1/P0)+g | Where, | |||
| = | (2.15/71.00)+0.065 | D1 | = | $ 2.15 | ||
| = | 9.53% | P0 | = | $ 71.00 | ||
| g | = | 6.50% |
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