Common stock value-Constant growth West Island Roofing, Inc., common stock paid a dividend of US$1.20 per share
Question:
a. What required rate of return for this stock would result in a price per share of US$28?
b. If West Island expects both earnings and dividends to grow at an annual rate of 10 percent, what required rate of return would result in a price per share of US$28?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Principles of Managerial Finance
ISBN: 978-1408271582
Arab World Edition
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
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