The stock price of Alps Co. is $67. Investors require a return of 10.5 percent on...

The stock price of Alps Co. is $67. Investors require a return of 10.5 percent on similar stocks. If the company plans to pay a dividend of $4.25 next year, what growth rate is expected for the company’s stock price? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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Expert Solution

Required rate=(D1/current price)+growth rate

0.105=(4.25/67)+growth rate

Growth rate=0.105-(4.25/67)

=4.16%(approx).

jeff jeffy answered 1 year ago

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