According to analysts, the growth rate in dividends for Acevedo for the previous 10 years has been 4%. If investors feel this growth rate will continue, what is the required return for the companys stock?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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According to analysts, the growth rate in dividends for Acevedo for the previous 10 years has been 4%. If investors feel this growth rate will continue, what is the required return for the companys stock?
You've collected the following information from your favorite financial website.
52-Week Price
Lo
10.49
33.42
Hi
78.00
55.81
130.93
50.24
35.00
Stock (Dividend)
Required return
Acevedo .42
Georgette, Incorporated 1.54
69.50
YBM 2.00
13.95
Manta Energy .80
20.74 Winter Sports .32
Dividend
PE
Yield % Ratio
2.9
3.8
2.2
5.2
1.5
%
6
10
10
6
28
Close
Price
14.50
40.43
88.97
15.43
??
According to analysts, the growth rate in dividends for Acevedo for the previous 10 years has been 4 percent. If investors feel this
growth rate will continue, what is the required return for the company's stock?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Net Change
-.24
-.01
3.07
-.26
.18
Transcribed Image Text:You've collected the following information from your favorite financial website. 52-Week Price Lo 10.49 33.42 Hi 78.00 55.81 130.93 50.24 35.00 Stock (Dividend) Required return Acevedo .42 Georgette, Incorporated 1.54 69.50 YBM 2.00 13.95 Manta Energy .80 20.74 Winter Sports .32 Dividend PE Yield % Ratio 2.9 3.8 2.2 5.2 1.5 % 6 10 10 6 28 Close Price 14.50 40.43 88.97 15.43 ?? According to analysts, the growth rate in dividends for Acevedo for the previous 10 years has been 4 percent. If investors feel this growth rate will continue, what is the required return for the company's stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Net Change -.24 -.01 3.07 -.26 .18
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