Homework Help: Math

Posted by Robert on Wednesday, January 6, 2010 at 1:34pm.

If a company pays $4.90 dividend at the end of the year, and the stock price is $70, and the growth rate is 6% can you tell me what the required rate of return would be using the dividend yield and growth rate (capital gains)?

Math - drwls, Wednesday, January 6, 2010 at 2:02pm
The REQUIRED rate is an arbitrary quantity, and depends upon the long term track record and business prospects of the company, as well as current bond market yields. In a word, it depends upon investor sentiment.

You have quoted ACTUAL stock performance data. It indicates that the current total return (dividends plus capital gain) is 6% + 4.90/70 = 13%

Answer this Question

Related Questions

math - If a company pays $4.90 dividend at the end of the year, and the stock ...
Accounting - If a company pays $4.90 dividend at the end of the year, and the ...
Math - Part 1. A stock is selling today for $40 per share. At the end of the ...
money and banking - price of stock is $50 at the beginning of year and $53 at ...
finance - Suppose that the price of a stock is $50 at the beginning of a year ...
Economics - Suppose that the price of a stock is $50 at the beginning of a year ...
Finance - Teddy Company paid a $3.50 dividend this year (D0 = $3.50). Next year ...
Finance. PLEASE HELP ME - 1) growth rates The stock price of the company is $76 ...
Finance questions - 1) growth rates The stock price of the company is $76 ...
Money and Banking - Price of stock is 50.00 at the beginning of a year and 53.00...

For Further Reading

First Name:
School Subject:
Answer: