Siblings Inc is expected to maintain a constant 38 percent g

Siblings, Inc., is expected to maintain a constant 3.8 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 5.6 percent. What is the required return on the company\'s stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return

Solution

Formula K =( D/S)+g K= Required return D= Dividend per share S= Stock price D/ S = Dividend yield g= growth rate Required return = 5.6% +3.8% Required return = 9.40%