Ask Question
17 November, 13:48

Androscoggin Copper can grow at 5% per year for the indefinite future. It's selling at $100, and next year's dividend is $5. What is the expected rate of return from investing in Carrabasset Mining common stock? Carrabasset and Androscoggin shares are equally risky.

+2
Answers (1)
  1. 17 November, 13:50
    0
    10%

    Explanation:

    The computation of the expected rate of return is shown below:

    Expected rate of return = (Next year dividend : selling price) + growth rate per year

    = (5 : $100) + 5%

    = 5% + 5%

    = 10%

    By considering all the elements that are given in the question i. e growth rate, selling price, and the next year dividend we can find out the expected rate of return i. e shown above
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Androscoggin Copper can grow at 5% per year for the indefinite future. It's selling at $100, and next year's dividend is $5. What is the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers