
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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How can I calculate using excel? (see screenshot)
![Problem 8-5 Stock Valuation [LO1]
Grateful Eight Co. is expected to maintain a constant 5 percent growth rate in its
dividends indefinitely. If the company has a dividend yield of 6.8 percent, what is the
required return on the company's stock? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Required return
%](https://content.bartleby.com/qna-images/question/35965c83-49a0-4a61-abb5-b01d5b731ec3/d3833070-30db-41b2-a0f8-914af3c79c49/qasx3bf_thumbnail.png)
Transcribed Image Text:Problem 8-5 Stock Valuation [LO1]
Grateful Eight Co. is expected to maintain a constant 5 percent growth rate in its
dividends indefinitely. If the company has a dividend yield of 6.8 percent, what is the
required return on the company's stock? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Required return
%
Expert Solution

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Step 1
Given information:
Constant growth rate in dividends is 5%
Dividend yield is 6.8%
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