One expect for holding disney common stock

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In July 1993 the Walt Disney Company's common stock was trading in the range of $36 to $41 per share. It paid dividends of $ .25 per share annually, on earnings of $1.80 (estimated for the fiscal year ending in September 1993).

a. If Disney bonds pay 7.55%, what rate of return should one expect for holding Disney common stock?

b. How much must Disney's stock price go up this year to give an investor that rate of return?

c. How fast must Disney increase its dividends, to merit such an increase in its stock price?

Reference no: EM132045990

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