The required return on a stock with a constant dividend growth rate can be calculated using the Gordon Growth Model (or Dividend Discount Model). The formula for the required return, $r$, is:

$r = \text{Dividend Yield} + \text{Dividend Growth Rate}$

Given:

• Dividend yield = 5.7%
• Dividend growth rate = 4.4%

Substitute the values:

$r = 5.7\% + 4.4\% = 10.1\%$

Answer:

The required return on the stock is 10.1%.

Would you like more details, or have any questions about this calculation?

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Relative Questions:

1. How does the dividend yield affect the required return on a stock?
2. What is the significance of a constant dividend growth rate for a stock?
3. How would the required return change if the dividend yield were lower?
4. What is the Gordon Growth Model, and when is it most applicable?
5. How is the dividend yield typically calculated?

Tip: For stocks with constant dividend growth, the Gordon Growth Model provides a straightforward way to estimate the required return.