Dewey has one share of stock and one bond. The total value of the two securities is $1,050. The bond has a YTM of 18.60 percent, a coupon rate of 12.40 percent, and a face value of $1,000; pays semi-annual coupons with the next one expected in 6 months; and matures in 6 years. The stock pays annual dividends that are expected to grow by 1.73 percent per year forever. The next dividend is expected to be $18.10 and paid in one year. What is the expected return for the stock? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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