Question 2 (of 10) Save & Exit Submit 2· 10.00 points The next dividend payment

Question

Question 2 (of 10) Save & Exit Submit 2· 10.00 points The next dividend payment by Dizzle, Inc., will be $2.55 per share. The dividends are anticipated to maintain a growth rate of 6.00 percent, forever. If the stock currently sells for $48.70 per share, what is the required return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Required return % References Worksheet Learning Objective: 07-01 Assess how stock prices depend on future dividends and dividend growth. Difficulty: 1 Basic Section: 7.1 Common Stock Valuation Check my work

Explanation / Answer

Required return=(Dividend for next period/Current price)+Growth rate

=(2.55/48.70)+0.06

=11.24%(Approx)

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.