1. Suppose the current price of a stock is $20. The expected dividend stream is...
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Accounting
1. Suppose the current price of a stock is $20. The expected dividend stream is $1 in 1 year, $1.10 in 2 years, $1.21 in 3 years, and so on, growing at a constant rate. What is the expected annual return of the stock?
2. Assume that the risk-free rate is 1% and the expected excess return of the benchmark is 5%. If a stock has beta of 1.2 and the dividend yield is 2%, what is the implied constant growth rate of dividends?
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