The next dividend payment by ecy

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Reference no: EM13844292

The next dividend payment by ECY, Inc will be $3.20 per share. The dividends are anticipated to maintain a growth rate of 6 percent, forever.

If ECY stock currently sells for $63.50 per share, what is the required return?

Price of the stock = Dividend (D0)/(r-g), r = return rate , g = growth rate, P = price Given, p = 63.50, D1=3.20, g=0.06

So, r = D0/P + g = 3.20/63.5+0.06 = 0.050346 = 5.03% Is this correct?

Reference no: EM13844292

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