y As She Goes Inc. will pay a year-end dividend of $3.20
Question
y As She Goes Inc. will pay a year-end dividend of $3.20 per share. Investors expect the dividend to grow at a
rate of 6% indefinitely.
| a. | If the stock currently sells for $32 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations. Enter your answer as a whole percent.) |
| Expected rate of return | % |
| b. | If the expected rate of return on the stock is 18.5%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Stock price |
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