Common stock value-constant growth

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Reference no: EM131868107

Common stock value—Constant growth

McCracken? Roofing, Inc., common stock paid a dividend of $1.02 per share last year. The company expects earnings and dividends to grow at a rate of 7?% per year for the foreseeable future.

a. What required rate of return for this stock would result in a price per share of $24?

b. If McCracken expects both earnings and dividends to grow at an annual rate of 11?%, what required rate of return would result in a price per share of $24??

Reference no: EM131868107

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