The growth rate in dividends is expected to be constant

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A) The next dividend payment by Blue Cheese, Inc., will be $2.04 per share. The dividends are anticipated to maintain a growth rate of 7 percent forever. If the stock currently sells for $41 per share, what is the required return? (Round your answer to 2 decimal places. (e.g., 32.16))

B) Great Pumpkin Farms just paid a dividend of $3.05 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 12 percent for the first three years, a return of 10 percent for the next three years, and a return of 8 percent thereafter. What is the current share price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Reference no: EM131012336

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