What is the market required rate of return on the pcj


P.C. Jenny Company (PCJ) and MartWall Company (MWC) are in the same risk class. PCJ dividends have remained unchanged at $3.00 per year, and are not expected to change in the future. MWC dividends have had a constant growth rate of 4 percent per year. The market price of the PCJ stock is $26/share. MWC just paid a dividend of $2.00 per share.

What is the market required rate of return on the PCJ stock?

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