History: Lekhak use Stri Ke Rone ka Karan Kyon Nahin Jaan Paya chapter -2 Hindi Dukh Ka Adhikar class 9

Lekhak use Stri Ke Rone ka Karan Kyon Nahin Jaan

dinadenoirefan

14.11.2020

Market rate of return on stock = 11.2152%

Explanation:

Details provided are

Market rate per share = $27.21

Dividend to be paid at year end = $1.80

Expected dividend growth rate = 4.6%

Expected return of market has to be calculated.

Using the dividend growth model we have,

$Price\ of\ share\ = \frac{Dividend\ at\ year\ end}{Market\ return\ - Growth\ rate}$

$27.21 = \frac{1.80}{Rm - 4.6}$

Market return - growth = $\frac{1.8}{27.21} = 6.6152$

Market return = 6.6152 + 4.6 = 11.2152%

Market rate of return on stock = 11.2152%

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