Ask Experts Questions for FREE Help !
Ask
    kallista's Avatar
    kallista Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 25, 2007, 04:52 PM
    Rate of return
    A firm pays 4.90 dividend at the end of year one, and has stock price of $70 and a constant growth rate of 6%. What is the required rate of return?
    rafian's Avatar
    rafian Posts: 4, Reputation: 2
    New Member
    		  
    #2

    Jun 1, 2007, 05:14 AM
    P = D0 / (r-g)

    r = D0/P + g

    r = (4.9 / 70) + .06

    r = .13 or 13%
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Rate of Return [ 2 Answers ]

:) A 2 year maturity bond with face value of $1,000 that makes annual coupon payments of $80 and is selling at face value. What will be the rate of return on the bond if its yield to marurity at the end of the year is a. 6% b. 8% c. 10% :)

Rate of Return [ 2 Answers ]

Would the normal rate of return be the same in all industries? Would it change over time?

Internal Rate of Return [ 1 Answers ]

I don't want the answer... I just have some questions to get me going. Here are the facts: Cost of the facility: $2,045,000 Useful Life: 12 years Selling for(after 12yrs): $600,000 Annual Cash Inflow: $400,000 Annual Cash Outflow: $160,000 Calculate the...

View more questions Search