The most recent dividend paid by company

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Reference no: EM131975758

1. The most recent dividend paid by a company was $1.25. The dividends are expected to maintain a constant growth rate of 6% forever. If the stock currently sells for $32.50 per share, what is the required return (round your answer to two decimal places)?

2. A company just paid a dividend of $0.80 per share and the dividend is expected to grow at a constant rate of 6% per year in the future. The company’s beta is 1.25, the market risk premium is 5%, and the risk-free rate is 4%. What is the company’s current stock price (round your answer to two decimal places)?

Reference no: EM131975758

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