What is the expected return for shareholders

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Reference no: EM13917632

Burgerama Inc. stock is currently trading at $12 per share and the company paid a dividend of $0.50 last year.

a) If the stock price is expected to increase by 6% and the dividend is expected to increase by 3%, what is the expected return for shareholders?

b) You want to find out the projected dividends for the next few years before buying any shares of this stock. During the next 3 years, dividends will grow 3% and then grow at 9% the following year with an 11% constant growth every year thereafter. The required rate of return is 12%. What is today's value of Burgerama Inc.'s stock?

Reference no: EM13917632

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