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What is the required rate of return on this stock

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Question - Cullumber Corp. paid a dividend of $2.32 yesterday. The company's dividend is expected to grow at a steady rate of 5 percent for the foreseeable future. If investors in stocks of companies like Cullumber require a rate of return of 20 percent, what should be the market price of Cullumber stock?

Sunland, Inc., is expected to grow at a constant rate of 6.25 percent. If the company's next dividend, which will be paid in a year, is $1.01 and its current stock price is $22.35, what is the required rate of return on this stock?

Reference no: EM133016521

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