Tutorial on finding out a company’s RRR
Company used here is Home Depot (HD)
On April 5, 2010 the stock price was $32.38 @ 8:22AM
The current divided and yield is $0.95 & 2.90%
Here is the set-up:
$0.95
(RRR?-.029)= $32.38
Simply take the $0.95/32.38= .029339
Take the .029339+.029=.058339
The .058339 is the RRR or what the current market investors want from the firm!
From there make a decision if this RRR is appropriate for this firm. Is it too high, too low?
You’ll use recent news about the firm and their financial statements to determine this.
This answers the following questions for your report:
Current RRR of Return for the firm? * Must select a firm that is paying a dividend!
Should we buy the stock? Why or Why not- With Details
Given the current RRR for the firm, should it be higher or lower?