The next dividend payment by Blue Cheese, Inc., will be $1.80 per share. The div
ID: 2624411 • Letter: T
Question
The next dividend payment by Blue Cheese, Inc., will be $1.80 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. If the stock currently sells for $35 per share, what is the required return? (Round your answer to 2 decimal places. (e.g., 32.16)) SHOW YOUR WORK
The next dividend payment by Blue Cheese, Inc., will be $1.80 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. If the stock currently sells for $35 per share, what is the required return? (Round your answer to 2 decimal places. (e.g., 32.16)) SHOW YOUR WORK
Explanation / Answer
required return = g+( current div (1+g))/current price
required return = 5% (1.8/35)
required return = 10.14%
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