A company recently paid a $1.00 dividend. The dividend is expected to grow at a

Question

A company recently paid a $1.00 dividend. The dividend is expected to grow at a 15.7 percent rate. At a current stock price of $89.29, what return are shareholders expecting? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

____

Ecolap Inc. (ECL) recently paid a $1.1 dividend. The dividend is expected to grow at a 20.12 percent rate. At a current stock price of $45.87, what return are shareholders expecting? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

1.
Return=Next DIvidend/Share Price+Growth Rate=1*1.157/89.29+15.7%=17.00%
2.
Return=Next DIvidend/Share Price+Growth Rate=1.1*1.2012/45.87+20.12%=23.00%

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