The next dividend payment by Skyline Rotech will be $1.85 per share. Dividends are expected to grow at a 5.5% annual rate indefinitely. If the stock currently sells for $46.25 per share, what is the required return?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
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The next dividend payment by Skyline Rotech will be $1.85
per share. Dividends are expected to grow at a 5.5% annual
rate indefinitely. If the stock currently sells for $46.25 per
share, what is the required return?
Transcribed Image Text:The next dividend payment by Skyline Rotech will be $1.85 per share. Dividends are expected to grow at a 5.5% annual rate indefinitely. If the stock currently sells for $46.25 per share, what is the required return?
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