Shack diesel using the constant growth model

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Reference no: EM131571968

Shack Diesel Company has stock trading today at $40.36 per share. The company just paid a $2.57 per share dividend. Kenny Smith, an analyst, believes investors should seek a 11.00% return to hold the stock. If we value Shack Diesel using the constant growth model, what dividend growth rate would justify these assumptions?

Reference no: EM131571968

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