Valuation of General Electric Stock The following information is taken from Yaho

Question

Valuation of General Electric Stock
The following information is taken from Yahoo finance for GE stock on Tuesday May 22, 2012:
Closing Price : $19.18
Beta: 1.57
Dividend history:
2005: $0.91
2006: $1.03
2007: $1.15
2008: $1.24
2009: $0.61
2010: $0.46
2011: $0.61
2012: $0.68
The market rate of return for large company stocks is 11% and the risk free rate is 3%
Using the above information, answer the following questions and show how you arrived at your answer:
1. What is the average dividend growth rate?
2. What is the required or fair rate of return for GE

Explanation / Answer

Excuse me but,what i submitted are right and i have the answers for other part as well but i am not pretty sure, should i post them as well? 2) required or fair rate of return for GE’s stock = risk free rate + average dividend growth rate = 3+0.2 = 3.2% please rate positively,,thanks

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