Explore BrainMass

Explore BrainMass

    Common stock value for Dennis and Dennis Research Inc

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The common stock of Denis and Denis Research, Inc., trades for $60 per share. Investors expect the company to pay a $3.90 dividend next year, and they expect that dividend to grow at a constant rate
    forever. If investors require a 10% return on this stock, what is the dividend growth rate that they are anticipating?

    © BrainMass Inc. brainmass.com October 2, 2020, 5:41 am ad1c9bdddf

    Solution Preview

    Current trade price of Common stock: $60 per share
    Expected dividend next year: $3.90 per share
    Required Return on stock: 10%
    The below formula is used to ...

    Solution Summary

    This tutorial provides guidelines on how to solve common stock value problem when there is constant growth in the dividend.