Siblings, Inc., is expected to maintain a constant 6.4 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.3 percent, what is the required return on the company's stock is 10.7 %.
What is Company?
The legal organization that conducts business is referred to as a "company." According to business law, the company will be the registrar. The task is being carried out by the business. It has a complicated organizational structure.
The term will be given are:
Dividend yield = 4.3 %
Growth rate = 6.4 %
Required rate of return = ?
Required rate of return = Dividend yield + growth rate
Required rate of return = Dividend yield (4.3 %) + growth rate ( 6.4 %)
Required rate of return = 10.7%.
Therefore, the correct answer is 10.7%.
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