Abc Suppose Paccar's current stock price is $108.26 and it is likely to paya $3.06 dividend next year. Since analysts estimate Paccar will have a5.6 percent growth rate, what is its required return? (Round your answerto 2 decimal places.)

To calculate the required return on Paccar's stock, we can use the Dividend Discount Model (DDM) for…

Answered: Suppose Paccar's current stock price is…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 16MC

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Suppose Paccar's current stock price is $108.26 and it is likely to pay a $3.06 dividend next year. Since analysts estimate Paccar will have a 5.6 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)