What constant-growth rate in dividends is expected for a stock valued at $32.40 if next year's dividend is forecast at $2.20 and
1 answer:
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Answer:
Ans. The average annual rate of return over the four years is 2.792%
Explanation:
Hi, first let´s introduce the formula to use
Where:
r(1),(2),(3)...n are the returns in each period of time
n =number of returns to average (in our case, n=4).
With that in mind, let´s find the average annual return over this four years.
Therefore, the average annual return of this invesment in 4 years is 2.2792%
Best of luck.