The Lory Company had net earnings of $127,000 this past year. Dividends of $38,100 were paid. The company's equity was $1,587,500. If Lory has 100,000 shares outstanding with a current market price of $11.625 per share, and a dividend growth rate is 5.6%, what is the firm’s discount rate?

Rate = 9.05%

Explanation:

To calculate the Dividend per share we'll have to

= Total Dividends Paid / Total Shares

= 38,100/100,000

= 0.38  Dividend per share

So, if we are to be using the constant Growth Model,

P = Price of Stock

= Estimated Dividends for next period

r = Required rate of return

g = Growth Rate

11.625 = 0.38(1.056)/(r - 0.056)

r = 9.05%

almost done 23 out of 25

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough