Equity: adding consensus growth rate to dividend yield

Came across a practice problem. The solution provided adds consensus growth rate to dividend yield to arrive returns…

div yield=3%

consensus growth=5.9%

Ke=3%+5.9%=8.9%

why is it not 3%*(1+5.9%)

Properly, it should be:

(1 + 3%)(1 + 5.9%)

Adding 3% to 5.9% is an approximation.

Your approach doesn’t get the 5.9% growth in share price. Check it.

perfect…i got it…thank you.

You’re welcome.