Answer:
Required return =10.1%
Explanation:
required return price is given by following relation
[tex]Required return=\frac{Dividend\ payable\ next\ year}{current\ stock\ price}+growth rate[/tex]
from the above information
dividend payable next year is = $3.05
current stock price = $49.70
growth rate = 4.00%
putting all value to get required return
[tex]Required return= =\frac{3.05}{49.70}+0.04[/tex]
Required return = 0.101
Required return =10.1%
