Estimate the growth rate of stock, Cost Accounting

Estimate the Growth rate of stock


stock price = 53

rate of return= 12%

expected dividend = 3.15

Formula :

Expected return  = (dividend paid + capital gain (growth)) / price of stock

Expected Growth = (price of stock x  expected return) - dividend paid

Expected growth  =  (53 x  12%)  - 3.15

Expected growth = 3.21

Growth rate = Expected growth / stock price * 100

Growth rate = 3.21 / 53 * 100

Growth rate = 6.05 % or 6 %

This can be solved through this formula as well


Dividend Growth rate = Discount rate - (dividend paid / stock price)

Dividend growth rate = 12% - ( 3.15 / 53)

Dividend growth rate = 6%

Posted Date: 3/19/2013 3:16:47 AM | Location : United States

Related Discussions:- Estimate the growth rate of stock, Assignment Help, Ask Question on Estimate the growth rate of stock, Get Answer, Expert's Help, Estimate the growth rate of stock Discussions

Write discussion on Estimate the growth rate of stock
Your posts are moderated
Related Questions
Question Hornsby Manufacturing has four categories of overheads. The four categories and the expected overhead costs for each category for next year are as follows:

CVP for Multiple Products What number of businesses sells only one manufactured goods? The reality is that firms usually give us the diverse product line, and the individual pr

what is the procedure of purchase of materials in large organisation?

Factory Overhead Budget This budget represents the forecasts of each the production variable and fixed and semi-variable overheads to be incurred throughout the budget period.

Standard Cost and Standard Costing To effectively control the costs of a certain organization, we require a yard stick to measure the real performance against. Traditionally,

Distinguish between,     (i)  short-run variable costs & long-run variable costs, and give an example of each one;   (ii)  the marginal cost &  the average cost of production

The following is a summary of a cash book for the year ended 31 April 2012 Payments                                              $              Receipts

Use a selected company or your current work environment to identify at least one cost or expense that would fit under each of the following categories: • Variable • Fixed • Mixed •

A college currently measures its performance by comparing the actual costs against its budgeted costs for the year.Now that the college is facing increased competition from Various