Estimating stock expected rate of return

Reference no: EM1366988

The common stock of KPD paid $1 in dividends past year. Dividends are expected to increase at an 8% yearly rate for an indefinite number of years.

a. If KPD's current market price is $25, what is the stock's expected rate of return?

b. If your required rate of return is 11 percent, what is the value of the stock for you?

c. Should you make the investment?

Reference no: EM1366988

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