Constant growth rate and g

Assignment Help Financial Management

Reference no: EM13808542

Constant Growth Rate, g

A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $3 per share (D₁ = $3), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 10% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of g? Round the answer to three decimal places.

Reference no: EM13808542

Questions Cloud

Birth through adolescence scenarios : Birth through Adolescence Scenarios

Calculate the expected dividend yield : You buy a share of The Ludwig Corporation stock for $18.30. You expect it to pay dividends of $1.02, $1.14, and $1.2741 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $28.80 at the end of 3 years. Calculate the growth rat..

About the preferred stock valuation : Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 12% of its $100 par value. Preferred stock of this type currently yields 10%. Assume dividends are paid annually. What is the value of Rolen's preferred stock?

What is the modern method for separating style : What is the modern method for separating style and structure when constructing a web page? How can you get a graphic image on the web stored on the hard disk of your PC

Constant growth rate and g : A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $3 per share (D1 = $3), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 10% (assume the market is in ..

Archaeologists for hauling the huge building blocks : Which method strikes you as most likely to be the correct explanation? Why?

Assignment on ethnographic comparison : Assignment on Ethnographic Comparison

In hidebound militarism and round-robin carnage : In these day in hidebound militarism and round-robin carnage, where even that beloved ambassador of peace , the Dalai Lama says it may be necessary to counter terrorism with violence, it's fair to ask: is humanity doomed? Are we born for the battlefi..

What is the expected return on investing in company c : Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return on investing in Company C?

User Account

All Pages