The next dividend payment by Savitz, Inc., will be $1.96 per share. The dividends are anticipated to maintain a growth rate of 4 percent forever. If the stock currently sells for $39 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

9.03%

Explanation:

The required rate of return for  Savitz, Inc., shall be determined through the following mentioned formula:

r=[d(1+g)/P] +g

In the given question

r=required rate of return=?

d(1+g)=next dividend payment to be made= $1.96 per share

g=growth rate=4%

P= current selling price of share=$39

r=[$1.96/$39] +4%

r=9.03%

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough