Universal Forest's current stock price is $154.00 and it is likely to pay a $5.23 dividend next year. Since analysts estimate Universal Forest will have a 13.0 percent growth rate, what is its required return?
14.71 percent
15.28 percent
13.62 percent
16.40 percent

16.40 percent

Step-by-step explanation:

-The growth rate is given by the formula:

Where

is the growth rate

is the required return

is the expected next dividend payout and current share prices respectively.

#We make R the subject of the formula and substitute to solve:

Hence, the required return is 16.40%

f(x) has value 150 at x= 0

and 0 at x= 3

so d(f(x))/dt = slope = -150/3 = -50