The next dividend payment by Blue Cheese, Inc., will be $2.08 per share. The div

Question

The next dividend payment by Blue Cheese, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $42 per share, what is the required return? (Round your answer to 2 decimal places. (e.g., 32.16))

The next dividend payment by Blue Cheese, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $42 per share, what is the required return? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

42= 2.08/(x-.06) x= 10.95

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