FIN 5001 – ABC is expected to pay a dividend of $1.6 per share
January 1st, 2018
ABC is expected to pay a dividend of $1.6 per share at the end of the year. The stock sells for $60 per share, and its required rate of return is 13.4%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)?Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.