Question

A stock is expected to maintain a constant dividend growth rate of 4.6 percent indefinitely. If the stock has a dividend yield of 5.9 percent, what is the required return on the stock?

Answer 1

10.5%

Step-by-step explanation:

Dividend yield=5.9%

Growth rate=4.6%

Required return on the stock=Dividend yield+growth rate

=5.9%+4.6%=10.5%