A stock just paid a dividend of $1.23 how is it required rate of return of...

A stock just paid a dividend of $1.23 how is it required rate of return of 10.7% and a constant dividend growth rate of 2.8% what return Will you earn if you buy the stock today and sell it after the next dividend assume the returns and growth rate remains
The Holding Period return is:

a 5.3%

b 8.5%

c 11.7%

D 10.6%

Expert Solution

To solve this answer we first need to find out the price of stock today and the price of stock after the next dividend. After solving everything the correct answer that comes is option D i.e. 10.6%

I have solved everything in the images attached below. Please check.

jeff jeffy answered 1 year ago

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