Ask Question
23 March, 22:23

A stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely. If the stock has a dividend yield of 5.7 percent, what is the required return on the stock

+3
Answers (1)
  1. 24 March, 00:18
    0
    Answer: 10.1%

    Explanation:

    The required rate of return on a stock is the minimum return on a stock that an investor is going to accept for owning that particular stock, as compensation for the risk that is associated with the stock.

    From the question, we are told that a stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely and that the stock has a dividend yield of 5.7 percent. The required return on the stock will be the addition of the growth and. The dividend yield. This will be:

    = 4.4% + 5.7%

    = 10.1%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely. If the stock has a dividend yield of 5.7 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers