stock (div) div % yld pe ratio close price net change You’ve collected the follo
ID: 2720295 • Letter: S
Question
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You’ve collected the following information from your favorite financial website. 52-Week Price in the table listed above. According to your research, the growth rate in dividends for Palm Coal for the previous 10 years has been 4.00 percent. Required: If investors feel this growth rate will continue, what is the required return for Palm Coal stock?
hi lostock
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78.4 10.53 palm coal 3.1 6 14.90 -0.24 55.81 33.42 lake leap grp 1.54 3.8 10 40.43 -0.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime 0.80 5.2 6 15.43 -0.26 35.00 20.74 Candy Galore 0.32 1.5 28 ?? 0.18Explanation / Answer
Price = recent dividend* ( 1 + growth rate )/( cost of equity - growth rate)
14.9 =(( 3.1/100)*14.9 )* (1 + .04)/(cost of equity - 0.04)
=7.224%
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