What is its required rate of return?

Mathematics
Tutor: None Selected Time limit: 1 Day

Booda Company's stock sells for $22 per share, its last dividend was $1.00. and its growth rate is a constant 8%. What is its required rate of return (hint: use the constant dividend growth model to solve for r).?


Nov 18th, 2015

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

22 = 1*1.08/(r-8%)

R= 12.91%

required rate of return = 12.91%


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Nov 18th, 2015

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