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Dry Dock Marina is expected to pay an annual dividend of $1.58 next year. The stock is selling for $18.53 a share and has a total return of 9.48 percent. What is the dividend growth rate?

Respuesta :

Answer:

0.95%

Explanation:

Data provided in the question

Annual dividend = $1.58

Price of the stock = $18.53

Total return = 9.48%

The computation of the dividend growth rate is shown below:

Price of the stock = Annual dividend ÷ (Required rate of return - growth rate)

$18.53 = $1.58 ÷ (9.48% - growth rate)

After solving this, the growth rate is 0.95%

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