Parrino, Fundamentals of Corporate Finance, 3e FINANCIAL MANAGEMENT ent BACK NEX

Question

Parrino, Fundamentals of Corporate Finance, 3e FINANCIAL MANAGEMENT ent BACK NEXT NEXT Proxicam, Inc., is expected to grow at a constant rate of 9.25 percent. If the company's next dividend, which will be paid in a year, is $1.45 and its current stock price is $22.35, what is the required rate of return on this stock? (Round intermediate c alculations to 4 decimal pla ces, e.g. 1.5325 : and final answer to 2 decimal places, e.g. 17.54%.) te of return By accessing this Question Assistance, you Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER Earn Maximum Points available only if you answer this question correctly in two attempts or less. assignment/test/aglist.uni?i Which of the following is true? Choose one answer.· the demand for b. the demand for both goods is likely to be

Explanation / Answer

Dear Student lets summaraise the question first then we will answer the question Growth rate (g) = 9.25% Dividend in next year (d1) = $1.45 Current stock price (Mp) = $22.35 Required rate of return (Ke) = ? Current market price (mp)= d1/ke-g 22.35= 1.45/Ke-0.0925 Ke-0.0925= 1.45/22.35 Ke-0.0925= 0.064877 Ke= 0.157377 Required rate of return = 15.74%

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