Thomas Brothers' stock is selling for $6.25 per share and it is expected to pay a $.50 per share dividend at the end of the year. The dividend of the stock is expected to grow at a constant rate of 7% per year. What is the expected rate of return on the stock?

Thomas Brothers' stock is selling for $6.25 per share and it is expected to pay a $.50 per share dividend at the end of the year. The dividend of the stock is expected to grow at a constant rate of 7% per year. What is the expected rate of return on the stock?

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 2P

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i need the answer quickly

Thomas Brothers' stock is selling for $6.25 per
share and it is expected to pay a $.50 per share
dividend at the end of the year. The dividend of
the stock is expected to grow at a constant rate
of 7% per year. What is the expected rate of
return on the stock?

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