Question

the expected return on natter corporation's stock is 14%. the stock's dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share. which of the following statements is correct?

Answer 1

The profit or loss an investor predicts from an investment with known historical return rates is known as the expected return (RoR).

How do you find expected rate of return?

All upcoming dividend payments made by the stock are included in the estimated market value. You can determine how much investors should be willing to pay for the shares if you can calculate the growth rate of the dividends. To determine the dividend increase for the following year, multiply this year's dividends by their growth rate.

An expected price level, also known as anticipated price level, is the rate or price that products and services might be expected to attain given a specific set of economic conditions.

In contrast to cash dividends, stock dividends are payments made to shareholders in the form of new shares. Each existing share gets paid a fraction of the distributions. For instance, if a business declares a 5% equity dividend, it will pay

Therefore, the correct statement is the stock price is expected to be $54 a share one year from now.

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