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Hero" firm just paid $1 dividend. Analysts are predicting that the firm will pay $1 in...

Hero" firm just paid $1 dividend. Analysts are predicting that the firm will pay $1 in a year, $2 in two years and $3 in three years from today. After that, the growth rate will be 6% a year forever. Assuming that the market price of the firm is $50, what is the required rate of return?

Solutions

Expert Solution

we will make the differenc to zero by using the goal seek funtion.

after pressing the enter button we get the follwoing solution

so the correct answer is 11.12%

jeff jeffy answered 1 year ago
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