The common stock of General Land Development Company (GLDC) is expected to pay a dividend of $1 25 next year and currently sells for $25 Assume that the firms future dividend payments are expected to grow at a constant rate for the foreseeable future Determine the implied growth rate of GLDCs divid...

The common stock of General Land Development Company (GLDC) is expected to pay a dividend of $1.25

Question:

The of General Land Development Company (GLDC) is expected to pay a of $1.25 next year and currently sells for $25. Assume that the firm’s future payments are expected to grow at a constant rate for the foreseeable future. Determine the implied growth rate of GLDC’s dividends (and earnings), assuming that the required rate of return of investors is 12 percent.

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...