XYZ companys stock has a dividend yield of 4%. Employing the Gordon Growth Model, what is the
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Question:
XYZ company’s stock has a dividend yield of 4%. Employing the Gordon Growth Model, what is the stock’s implied growth rate if the relevant interest rate is 3% with a 8% risk premium?
Beta is not provided. The answer should be 7%.
Any clue how to derive the answer of 7%?
Related Book For
Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date: