The next dividend payment by Grenier, Inc., will be $1.40 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $25 per share, what is the required return

Required Rate of return is 11.6%

Explanation:

Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.

As we have the value of the share, we need to calculate the required return rate using following formula.

As the dividend is also given for the next period so we don't need to grow it.

Value of Share = Dividend / (Rate of return - Growth rate)

$25 = $1.40 / ( r - 6% )

r - 0.06 = $1.40 / $25

r - 0.06 = $1.40 / $25

r - 0.06 = 0.056

r = 0.056 + 0.06

r = 0.116

r = 11.6%

if it is for a job, then you should learn everything you can about the job, like what does it involve, what qualification is required and how you are the right person for that job. dress appropriately for the interview. get plenty of rest the night before. good luck!