Musters Ltd currently pays a dividend of $0.76.One share in Musters Ltd currently costs $14.25.Given a cost of equity capital of 9%,what is the implied constant growth rate?

Question

Quizplus · Accepted Answer

Rearranging equation 11.10,we can obtain the implied constant growth rate for Musters Ltd in the following way: g = [14.25(0.09)- 0.76]/[14.25 + 0.76] = 0.0666 = 6.66%.

Musters Ltd Currently Pays a Dividend of $0 1.9891% 1.9891 \% 1.9891%

Musters Ltd Currently Pays a Dividend of $0 $1.9891 \%$