Janlea Co.had total net earnings of $158,600 this past year and paid out 60 percent of those earnings in dividends.There are 84,000 shares of stock outstanding at a current market price of $18.43 a share.If the dividend growth rate is 2.8 percent,what is the required rate of return?
A)14.27%
B)12.56%
C)8)95%
D)10.40%
E)11.60%

Question

Quizplus · Accepted Answer

Dividend per share = (0.60 × $158,600)/ 84,000 = $1.13286
R = $1.13286 / $18.43 + 0.028 = 0.0895,or 8.95%

Janlea Cohad Total Net Earnings of $158,600 This Past Year and and Paid