PO = $10
Subject:FinancePrice:2.86 Bought3
PO = $10.00, DO = $1, g = 4% per year. What is the required return? Answer: 1 Check
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Solution :
Price, P0 = $ 10
Current Dividend, D0 = $ 1
g = 4% pa
Required return , k = [ D0*(1+g) / P0 ] + g
= 1*(1+4%) / 10 + 4%
= 1.04/10 + 4%
= 14.4%
