Suppose Universal Forest’s current stock price is $63.00 and it is likely to pay

Question

Suppose Universal Forest’s current stock price is $63.00 and it is likely to pay a $0.67 dividend next year. Since analysts estimate Universal Forest will have a 8.4 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)

Suppose Universal Forest’s current stock price is $63.00 and it is likely to pay a $0.67 dividend next year. Since analysts estimate Universal Forest will have a 8.4 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)

Explanation / Answer

Required Return = (D1/Current Price (P)) +g

= (0.67/63) + 0.084 = 0.0946 = 9.46 %

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.