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24 August, 21:51

Dry Dock Marina is expected to pay an annual dividend of $1.58 next year. The stock is selling for $18.53 a share and has a total return of 9.48 percent. What is the dividend growth rate?

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  1. 24 August, 22:09
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    0.95%

    Explanation:

    Data provided in the question

    Annual dividend = $1.58

    Price of the stock = $18.53

    Total return = 9.48%

    The computation of the dividend growth rate is shown below:

    Price of the stock = Annual dividend : (Required rate of return - growth rate)

    $18.53 = $1.58 : (9.48% - growth rate)

    After solving this, the growth rate is 0.95%
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