According to the 2018 Value Line Investment Survey, the growth rate in dividends for Ralph Lauren for the next five years will be .5 percent. If investors feel this growth rate will continue, what is the required return for the company's stock?
Since the rate of return is calculated as dividend payment/stock price + dividend growth rate and since that growth rate for the next five years will be 0.5 %, than rate of return will be higher than 0.5 %.
