The next dividend payment by Halestorm, Inc., will be $1.52 per share. The divid

Question

The next dividend payment by Halestorm, Inc., will be $1.52 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $28 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The next dividend payment by Halestorm, Inc., will be $1.52 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $28 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

R = (D1 / P0) + g

R = ($1.52 / $28) + .06

        R = .11428 or 11.43%

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