Mammoth Mart's common shares are currently trading for $59.85 and the company paid its annual dividend of $0.60 per share.If your required rate of return is 12%,what is the implied growth rate in dividends? (Assume that dividends are expected to grow at a constant rate in perpetuity.)

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Quizplus · Accepted Answer

11ea7fdb_fbf2_09ac_a768_fd2a369eedc2_TB2902_11 = 11ea7fdb_fbf2_09ad_a768_9d6161f64aed_TB2902_11 59.85 = 11ea7fdb_fbf2_09ae_a768_cbb744d13734_TB2902_11 7.182 - 59.85g = .60 + .60g
6.582 = 60.45g
g = 10.89%

Mammoth Mart's Common Shares Are Currently Trading for $59