Schlumberger is selling for $64.91 per share and paid a dividend of $1.10 last year.

(Common stock valuation) Schlumberger is selling for $64.91 per share and paid a dividend of $1.10 last year. The dividend is expected to grow at 4 percent indefinitely. What is the stock’s expected rate of return?

Expert Solution

Answer : Calculation of Expected Rate of Return :

Expected Rate of Return = [Expected Dividend / Current Price] + Growth Rate

= [1.10 * (1 + 0.04) / 64.91 ] + 0.04

= 0.01762440301 + 0.04

= 0.0576 or 5.76%

jeff jeffy answered 2 years ago

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Schlumberger is selling for $64.91 per share and paid a dividend of $1.10 last year.

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