Bruer, Inc., is expected to maintain a constant 6.05 percent growth rate in its

Question

Bruer, Inc., is expected to maintain a constant 6.05 percent growth rate in its dividends, indefinitely.

If the company has a dividend yield of 4.55 percent, what is the required return on the company’s stock? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.161).)

If the company has a dividend yield of 4.55 percent, what is the required return on the company’s stock? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.161).)

Explanation / Answer

Required return = dividend yield + Constant growth rate

Required return = 4.55% + 6.05%

Required return = 10.60%

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