Chapter 4 The Value of Common Stocks

23. Lake Co. has paid a dividend $3 per share out of earnings of $5 per share. If the book value per share is $40 and the share value is 52.50 per share, calculate the required rate of return on the stock. (Use the calculated 'g' from the previous problem to answer this question) A) 11% . B) 12% . C) 5% . D) 6% . Answer: A. Type: Difficult ... ................
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