Pregunta
The common stock of Sweet Treats is selling for
per share. The company is
expected to have an annual dividend increase of 3.5 percent indefinitely and pay a dividend
of
in one year. What is the total return on this stock?
a.
b.
c.
d.
e.
expected to have an annual dividend increase of 3.5 percent indefinitely and pay a dividend
of
a.
b.
c.
d.
e.
Ask by Hardy Mcfarlane. in the United States
Mar 12,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
The total return on the stock is approximately 11.42%.
Solución

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Como
The Deep Dive
To find the total return on the stock, you can use the formula for total return, which includes both the dividend yield and the growth rate of the dividend.
The dividend yield can be calculated as follows:
Next, you add the expected growth rate of the dividend:
Therefore, the total return on this stock is
.

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