Posted: March 6th, 2014
Finance expected rate of return
Steady As She Goes, Inc., will pay a year-end dividend of $3.30 per share. Investors expect the dividend to grow at a rate of 4% indefinitely.
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| a. | If the stock currently sells for $33 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations.) |
| Expected rate of return | % |
| b. | If the expected rate of return on the stock is 16.5%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Stock price |
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