If the price of Toms Handbags Inc. stock is $43, it
required return is 20%, and the last dividend was $3, what is its dividend
growth rate? ( Round to the nearest tenth)

Thank you for the opportunity to help you with your question!

Stock Price = D_{1} ÷ (k – g)

43 =3/(20-g)

20-g = 3/43 ; 20-g =0.069

g = 20-0.069 = 19.93 %.

Hence Answer = 19.9%

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