The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow...

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The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow...

The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years. If NCP's current market price is $23.50 per share, what is the stocks expected rate of return?

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Answer 1

Answer #1

Expected rate=(D1/Current price)+Growth rate

=(1.32*1.08)/23.5+0.08

which is equal to

=14.07%(Approx).

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Answer 2

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