Bates, Inc. pays a dividend of $1 and is currently selling for $32.50. If investors require a 12 percent return on their investment from buying Bates stock, what growth rate would Bates, Inc. have to provide the investors?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
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Calculate growth rate

Bates, Inc. pays a dividend of $1 and is
currently selling for $32.50. If investors require
a 12 percent return on their investment from
buying Bates stock, what growth rate would
Bates, Inc. have to provide the investors?
Transcribed Image Text:Bates, Inc. pays a dividend of $1 and is currently selling for $32.50. If investors require a 12 percent return on their investment from buying Bates stock, what growth rate would Bates, Inc. have to provide the investors?
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