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Expected rate of return and stock price

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Rate of Return. Steady As She Goes, Inc. will pay a year-end dividend of $3 per share. Investors expect the dividend to grow at a rate of 4 percent indefinitely.

a. If the stock currently sells for $30 per share, what is the expected rate of return on the stock?

b. If the expected rate of return on the stock is 16.5 percent, what is the stock price?

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Expected rate of return and stock price are calculated for Steady As She Goes, Inc with a year-end divided of $3 per share.

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Rate of Return. Steady As She Goes, Inc. will pay a year-end dividend of $3 per share. Investors expect the dividend to grow at a rate of 4 percent indefinitely.

a. If the stock currently sells for $30 per share, what is the expected rate of return on the stock?

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