Coors just paid out a dividend of $1.00 on its common stock,which is currently trading at $37.27.If dividends are paid annually and are expected to grow in value by 1% per annum forever,then what return will a shareholder earn if the stock is purchased today?

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Quizplus · Accepted Answer

11ea7fdb_fbf0_d110_a768_f52d3cfcbf29_TB2902_11 = 11ea7fdb_fbf0_d111_a768_e1f82090874e_TB2902_11 37.27 = 11ea7fdb_fbf0_d112_a768_bfff07051ab8_TB2902_11 37.27k - .3727 = 1.01
37.27k = 1.3827
k = 3.71%

Coors Just Paid Out a Dividend of $1