As a financial analyst, you would like to estimate the dividend growth rate for company XYZ stock. The company just paid a dividend of $3.5 per share and its stock is currently priced at $51. You believe the dividend will grow at a constant rate forever. If the investors require a rate of return of 12%, what is the dividend growth rate?

Answer rating: 100% (QA)

Heres the estimation The constant dividend growth model formula is Dividend growth rate Dividend pay... View the full answer