Carnes Cosmetics Co.'s stock price is $49, and it recently paid a $1.00 dividend. This dividend is expected to grow by 29% for the next 3 years, then grow forever at a constant rate, g; and rs = 13%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places. 8.5 %
Carnes Cosmetics Co.'s stock price is $49, and it recently paid a $1.00 dividend. This dividend is expected to grow by 29% for the next 3 years, then grow forever at a constant rate, g; and rs = 13%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places. 8.5 %
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
Problem 1PS
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Transcribed Image Text:Carnes Cosmetics Co.'s stock price is $49, and it recently paid a $1.00 dividend. This dividend is expected to grow by 29% for the next 3 years, then grow forever at a constant rate, g; and rs = 13%. At what constant rate is the stock expected to grow after Year 3? Do not round
intermediate calculations. Round your answer to two decimal places.
8.5
%
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