About adding more growth stocks to your portfolio

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Reference no: EM131328137

You recently overheard a two finance students talking in the cafeteria about the growth rate of Comstock’s Cookies. As a savvy investor yourself, you are thinking about adding more growth stocks to your portfolio. You know that Comstock’s Cookies is currently trading for $41 and recently paid a dividend of $1.75/share. You require a 10% return as an investor.

a) What is the current assumed growth rate that is priced into this stock?

b) Suppose the growth rate changed to 8%. What is the new price of the stock?

Reference no: EM131328137

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