Common stock value: Constant growth The common stock of Barr Labs Inc., trades for $111 per share. Investors expect the company to pay a(n) $1.38 dividend next year, and they expect that dividend to grow at a constant rate forever. If investors require a(n) 14.4% return on this stock, what is the dividend growth rate that they are anticipating? The anticipated dividend growth rate is %. (Round to two decimal places.)
Common stock value: Constant growth The common stock of Barr Labs Inc., trades for $111 per share. Investors expect the company to pay a(n) $1.38 dividend next year, and they expect that dividend to grow at a constant rate forever. If investors require a(n) 14.4% return on this stock, what is the dividend growth rate that they are anticipating? The anticipated dividend growth rate is %. (Round to two decimal places.)
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 1P
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