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egoroff_w [7]
3 years ago
14

The stock price of Webber Co. is $68. Investors require an 11 percent rate of return on similar stocks.

Business
1 answer:
zheka24 [161]3 years ago
7 0
To get the growth rate, we will follow the Gordon Growth modelP= D/(K-G)whereP= stock value=$68D= Expected dividend=$3.85G= Growth rateK= required rate of returnG =K-(D/P)Substitute the given valuesG= 0.11-(3.85/68)
G= 5.34%The growth rate for stock required is 5.34%
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