How to calculate the expected rate of return of stock If an investor purchases the shares of a company at a price of 52.5 yuan, the company pays a dividend of 5 yuan per share at the end of last year, and the company's shares are expected to grow at an annual rate of 5% in the future, the expected return rate of the investor is

How to calculate the expected rate of return of stock If an investor purchases the shares of a company at a price of 52.5 yuan, the company pays a dividend of 5 yuan per share at the end of last year, and the company's shares are expected to grow at an annual rate of 5% in the future, the expected return rate of the investor is

The answer is wrong. The formula is correct, but the applied data is wrong. It should be d0 = 5. Note that the time of paying dividend of 5 yuan per share mentioned in the title is at the end of last year, so D1 = d0 * (1 + 5%) = 5 * (1 + 5%) = 5.25 in the formula. Therefore, P = D1 / (R-G) is 52.5 = 5.25 / (R-5%), that is, 10 = 1 / (R-5%), that is, 0.1 = R-5%, that is, r = 15%