The market price of a stock is $24.51 and it just paid a dividend of $1.94. The required rate of return is 11.26%. What is the expected growth rate of the dividend? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
The market price of a stock is $24.51 and it just paid a dividend of $1.94. The required rate of return is 11.26%. What is the expected growth rate of the dividend? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 3P
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Transcribed Image Text:Using formula for constant dividend growth model,
24.51 = (1.94)*(1+g) / (.1126 - g).
Solving for g, you have 0.031
Transcribed Image Text:#1 O
The market price of a stock is $24.51 and it just paid a
dividend of $1.94. The required rate of return is 11.26%.
What is the expected growth rate of the dividend?
Submit
Answer format: Percentage Round to: 2 decimal places
(Example: 9.24%, % sign required. Will accept decimal
format rounded to 4 decimal places (ex: 0.0924))
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