The price of Rushmore Inc

Finance Dec 23, 2020

The price of Rushmore Inc. is currently at $44.05, the company is expected to pay a dividend of $3.05 next year. Dividends are growing at a rate of 3.25 percent per year. What is the return that the market requires on this company? 692 10.92% 10.17% 617%

Expert Solution

Required Return = (D1 / P0 + g) * 100

= (3.05/44.05 + 0.0325 ) *100

= 10.17%

Therefore Correct answer is C 10.17%

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