1. Analysts expect the dividend growth rate for Main Street Capital to be a constant 8 percent in the future. The required return for the stock is 15 percent.
a. If the most recent dividend is $2.89, what is the value of Main Street Capital stock?
b. What would happen to the value of the stock if the actual growth rate is 10 percent? Why?
Answer a) Value of Main Street Capital stock = 44.59 b) Value of the stock would increase... View the full answer