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What is the required rate of return on a share that is expected to pay a...

What is the required rate of return on a share that is expected to pay a constant dividend of $6.00 every year in perpetuity and is priced at $40.00?

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Expert Solution

Required rate of return=Annual dividend/current price

=6/40

which is equal to

=15%

jeff jeffy answered 2 years ago
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