Dividend Discount Model: Determining Expected Annual Growth Rate of ELO Stock

What is the expected annual growth rate of the dividend for ELO stock?

Based on the data provided, what is the percentage of the expected annual growth rate of the dividend for ELO stock?

Answer:

The expected annual growth rate of the dividend for ELO stock is approximately -6.38%.

To determine the expected annual growth rate of the dividend for ELO stock using the Dividend Discount Model, we can use the following formula:

Expected Dividend Growth Rate = (Dividend / Stock Price) - Rate of Return

Given:

Dividend = $8.68

Stock Price = $73.62

Rate of Return = 18.17%

Expected Dividend Growth Rate = ($8.68 / $73.62) - 0.1817

Expected Dividend Growth Rate ≈ 0.1179 - 0.1817

Expected Dividend Growth Rate ≈ -0.0638

Therefore, the expected annual growth rate of the dividend for ELO stock is approximately -6.38%.