Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Common stock value-Constant growth McCracken Roofing, Inc., common stock paid a dividend of $1.06 per share last year. The company expects eamings and
i of
dividends to grow at a rate of 7% per year for the foreseeable future
a. What required rate of return for this stock would result in a price per share of $30?
b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $30?
a. The required rate of return for this stock, in order to result in a price per share of $30, is %. (Round to two decimal places.)
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Transcribed Image Text:P7-9 (similar to) Question Help ▼ Common stock value-Constant growth McCracken Roofing, Inc., common stock paid a dividend of $1.06 per share last year. The company expects eamings and i of dividends to grow at a rate of 7% per year for the foreseeable future a. What required rate of return for this stock would result in a price per share of $30? b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $30? a. The required rate of return for this stock, in order to result in a price per share of $30, is %. (Round to two decimal places.) ext a Librai Calculat tesource Enter your answer in the answer box and then click Check Answer. Study part remaining Clear All Check Answer nication Tools> This course (Introductio 1:34 AM Type here to search 3/24/202 insert prt sc %23 & 3. 6. 8. 6. backspace W R T. Y G H. K pause M. alt alt ctrl USE YOUR SMARTPHONE FO B
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