Assume a stock will pay dividends that increase at a constant rate every year forever, and...

 

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Assume a stock will pay dividends that increase at a constant rate every year forever, and that the dividend one year from now is expected to be $2.27. The current stock price is $68, and the required return on the stock is 8.3%. The annual growth rate in dividends expected to be _% Round your final answer to 4 decimals (xx.xx%). Example: .12345 or 12.345% should be entered as: 12.35 Margin of error for correct responses: +/- .02 (%) Assume a stock will pay dividends that increase at a constant rate every year forever, and that the dividend one year from now is expected to be $2.27. The current stock price is $68, and the required return on the stock is 8.3%. The annual growth rate in dividends expected to be _% Round your final answer to 4 decimals (xx.xx%). Example: .12345 or 12.345% should be entered as: 12.35 Margin of error for correct responses: +/- .02 (%)

Answer rating: 100% (QA)

To find the annual growth rate in dividends g we can use the Gordon Growth Model formula P0 D1r g W... View the full answer