Problem:
Stock in Simons Industries is currently selling for $91.00. It just paid its annual dividend of $1.00 after reporting an ROE of 15%, of which 50% is paid as dividends.
Required:
Question: What is the expected return of this stock?
- 9.00%
- 8.06%
- 8.45%
- 8.68%
- 8.52%
Note: Provide support for rationale.