Answered: Sarah Co. just paid $2.10 dividend. If…

Sarah Co. just paid $2.10 dividend. If the stock is selling for $30, at what rate the company's dividend must grow for you to meet the required rate of return of 13.7%?

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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Question

Sarah Co. just paid $2.10 dividend. If the stock is selling for $30, at what rate the company's dividend must grow for you to meet the required rate of return of 13.7%?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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