Question

The next dividend payment by Dizzle, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 5.00 percent, forever. If the stock currently sells for $49.30 per share, what is the required return

Answer 1

Answer:b9.89

Step-by-step explanation:

10-.11=9.89

Answer 2

10.78%

Step-by-step explanation:

The next dividend payment for Dizzle incorporation is $2.85

The growth rate is 5%

Current stock price is $49.30

Therefore the required return can be calculated as follows

= dividend payment/stock price + growth rate

= 2.85/49.30 + 5/100

= 0.0578 + 0.05

= 0.1078 × 100

= 10.78%