The stock price of XYZ Co. is $24.82. Investors require an 8.46 percent rate of return on similar stocks. If the company plans to pay a dividend of $2.52 next year, what constant growth rate (in percent) is expected for the company's stock price? Answer to two decimals.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 16P
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The stock price of XYZ Co. is $24.82. Investors require an 8.46 percent rate of return on similar
stocks. If the company plans to pay a dividend of $2.52 next year, what constant growth rate (in
percent) is expected for the company's stock price? Answer to two decimals.
Transcribed Image Text:The stock price of XYZ Co. is $24.82. Investors require an 8.46 percent rate of return on similar stocks. If the company plans to pay a dividend of $2.52 next year, what constant growth rate (in percent) is expected for the company's stock price? Answer to two decimals.
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