Wonder Trees Inc. expects to pay the next dividend payment of $2.8 per share (D1). The...

Wonder Trees Inc. expects to pay the next dividend payment of $2.8 per share (D₁). The company is expected to maintain a 6 percent growth rate forever. If the company stock currently sells for $39 per share, the required return should be ______ percent. Express in percentage without the % sign, and round it to two decimal places, e.g., 13.45.

Expert Solution

r - 0.06 = 2.8/39

r - 0.06 = 0.0718

r = 13.18%

jeff jeffy answered 2 years ago

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