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A company recently a $0.80 dividend. The dividend is expected to grow at 14.1 percent rate....

A company recently a $0.80 dividend. The dividend is expected to grow at 14.1 percent rate. At a current stock price of 67.60, what return are shareholders expecting ? Round to two places


Expected return ______%
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Answer #1

Recent Dividend paid(D0) = $0.80

Growth rate of Dividend(g) = 14.1%

Current Stock Price(P0) = $67.60

Calculating the Exppected Return(ke) using dividend growth model:-

Ke = 15.45%

So, Expected return 15.45%

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