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24 February, 03:56

A stock is expected to maintain a constant dividend growth rate of 4.6 percent indefinitely. If the stock has a dividend yield of 5.9 percent, what is the required return on the stock?

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  1. 24 February, 05:10
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    10.5%

    Explanation:

    Dividend yield=5.9%

    Growth rate=4.6%

    Required return on the stock=Dividend yield+growth rate

    =5.9%+4.6%=10.5%
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