Blossom Corporation’s common shares are trading at $23 per share and paid a dividend of $1.20...

Blossom Corporation’s common shares are trading at $23 per share and paid a dividend of $1.20 per share last year. The growth rate is expected to be 5%. Calculate Sheridan’s required return on common shares. (Round final answer to 2 decimal places, e.g. 15.75.)

Expert Solution

Required return=(D1/Current price)+Growth rate

=[(1.2*1.05)/23]+0.05

=(1.26/23)+0.05

which is equal to

=10.48% (Approx)

jeff jeffy answered 2 years ago

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