Constant growth rate-g, A stock is trading at $40 per

Constant growth rate-g

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Reference no: EM13883340

Constant Growth Rate, g

A stock is trading at $40 per share. The stock is expected to have a year-end dividend of $2 per share (D1 = $2), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 14% (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: EM13883340

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