The next dividend payment (D 1 ) by Cold Beer, Inc., will be $ 2.6 per share. Th

Question

The next dividend payment (D1) by Cold Beer, Inc., will be $ 2.6 per share. The dividends are anticipated to maintain a 6 percent growth rate forever. If the stock currently sells for $ 42 per share, the required return is ______ percent. Round it to two decimal places, e.g., 13.45. The next dividend payment (D1) by Cold Beer, Inc., will be $ 2.6 per share. The dividends are anticipated to maintain a 6 percent growth rate forever. If the stock currently sells for $ 42 per share, the required return is ______ percent. Round it to two decimal places, e.g., 13.45.

Explanation / Answer

42 = 2.6/(r-6%)

r= 12.19%

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