Maintains a constant growth rate in dividends

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1. The next dividend payment by Firm C will be $2.51 per share. The dividends are anticipated to maintain a 1.4 percent growth rate, forever. If the stock currently sells for $36.78 per share, what is the required return? Express your answer as a percentage and round to four decimal places (e.g., 15.83% = 0.1583).

2. Firm S stock currently sells for $27.55 per share. The market requires a 8 percent return on the firm's stock, and the dividend to be paid one year from now is $1.82. The company maintains a constant growth rate in dividends. What is this growth rate? Express your answer as a percentage and round to four decimal places (e.g., 15.83% = 0.1583).

3. Firm T stock currently sells for $51.18 per share. The market requires a 9 percent return on the firm's stock, and the most recent annual dividend per share was $3.33. The company maintains a constant growth rate in dividends. What is this growth rate? Express your answer as a percentage and round to four decimal places (e.g., 15.83% = 0.1583).

Reference no: EM131728493

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