Question

Calculate the average growth rate. (Enter your answer as a percentage, rounded to 2 decimal places, using intermediate calculations rounded to at least 4 decimal places.)

Answer 1

Answer:

Growth rate is 6%

Explanation:

Po = $\frac{D1}{r-g}$

P  = 0.3 / (0.1 - 0.06)

P =  $75

Dividend growth model is used to calculate the stock price based on the dividend growth.