D1 (dividend in year 1) is equals to 0.8 (working 1)
Po (price of the stock) is equals to 50 (Given in the question)
g (growth rate) is equals to 10% (Given in the question)
Putting the values
= 1.6% + 10% = 11.60%
Required rate of return in 11.60%
Working 1
EPS * 0.4 = Dividend per share
2 * 0.4 = Dividend per share
dividend per share is equal to 0.8
Comments
Leave a comment