Assume that analysts are projecting a current year growth rate = 6.5% for TT. Given this growth
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Question:
Assume that analysts are projecting a current year growth rate = 6.5% for TT. Given this growth rate, what is your estimate of the required return on TT common stock with the dividend growth model? What do you observe about the relative contribution to the total return from the dividend yield as opposed to the capital gains yield?
Given:
- growth rate (g) = 6.5%
- current price of the stock (P0) = $157.86
- current year dividend = $2.68
Related Book For
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin
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