Cara Fabricating Co. and Taso Corp. agreed orally that Taso would custom-manufacture a compressor for Cara at a price of $120,00
1 answer:
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Answer:
expected return = 12.03%
Explanation:
using the dividends growth model we can calculate the required return
2.22 x 1.03 = 2.2866
We must remember that the gordel model is used with next year dividends
2.2866(return - 0.023) = 19
2.2866/19 +0.023 = return
return = 12.03%