Find the equilibrium expected growth rate

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Reference no: EM1316176

Calculation of equilibrium expected growth rate.

McDonnell manufacturing is expected to pay a dividend of $1.50 per share at the end of the year (D1 = $1.50). The stock sells for $34.50 per share, and its required rate of return is 11.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

Reference no: EM1316176

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