Question

Northrup-Grumman Corporation is expected to pay $1.25 per share for its next dividend. If shares are trading at $27.22 and analysts expect common dividends to grow at 2.4%, what is the return on common shares?

Answer 1

the return on common shares is 6.99%

Step-by-step explanation:

The computation of the return on common shares is shown below:

= Dividend ÷ Stock price + growth rate

= $1.25 ÷ $27.22 + 2.4%

= 6.99%

hence, the return on common shares is 6.99%

We simply applied the above formula so that the correct value could come

And, the same is to be considered