The current stock price of HHBA A is 101.00$. The last dividend payed for HHBA A is 3.50$, and dividends are expected to grow at a constant rate of 6%. Now i should calculate the required return using an asset pricing model. What is it?
1 Answer
Under Dividend Discount Model,
P = D / (r-g)
101.00=3.50/(r-0.06)
r = 0.0946535 = 9.47% = required return