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Compute the required rate of return

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Reference no: EM132780798

The Common Stock of Drumman Co. is selling for $50 per share. If the recent dividend of $2.50 is expected to grow at a constant rate of 5% in the future.

-Compute the required rate of return?

-Would the required return increase, decrease or remain the same for each of the following independent assumptions:

-The dividend payout increases.

-The expected growth rate increases.

-The stock price increases.

Reference no: EM132780798

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