What is the required rate of return on stock

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Reference no: EM131309804

1. ABC Company's last dividend was $0.8. The dividend growth rate is expected to be constant at 8% for 3 years, after which dividends are expected to grow at a rate of 4% forever. The firm's required return (rs) is 12%. What is its current stock price (i.e. solve for Po)?

2. The common stock of ABC Industries is valued at $43.06 a share. The company increases their dividend by 6.6 percent annually and expects their next dividend to be $6.4. What is the required rate of return on this stock?

Reference no: EM131309804

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