An issue of common stock is selling for $58.30. The year end dividend is expected to be $3.15 assuming a constant growth rate of 10%. What is the required rate of return?
17.4
14.9
15.4
15.9
r = [D1 / P0] + g
= [$3.15 / $58.30] + 0.10
= 0.0540 + 0.10 = 0.1540, or 15.40%
So, 3rd option is correct.
An issue of common stock is selling for $58.30. The year end dividend is expected to...
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