Garage, Inc., is expected to maintain a constant 5 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 7.5 percent, what is the required return on the company's stock?
What is the formula to solve this?© BrainMass Inc. brainmass.com March 4, 2021, 5:37 pm ad1c9bdddf
Please refer to attached file.
Assuming that the cash dividend payment change at the rate of 5% from one period to the next indefinitely,
P0 = ------------- where P0 = price of ...
The solution displays the formula, the calculations and good explanations.