Double Steel Industries $($M$)$ Sdn Bhd common share paid a dividend of RM$3\mathrm{.}35$ per share last year. The company anticipates that its earnings and dividends to grow at a rate of $2\mathrm{.}5$ percent per year for the foreseeable future. Based on the information, calculate the new required rate of return if the price per common share is RM$16\mathrm{.}85$ by expecting earning and dividends to grow at $4$ percent annually.

Answer rating: 100% (QA)

This can be calculated using the Gordons Dividend Growth Model which is also known as the ... View the full answer