What Is the Required Rate of Return on a Share

question 36

Multiple Choice

What is the required rate of return on a share that is expected to pay a constant dividend of $3.60 in perpetuity and is priced at $27.50?

• A)13.09% p.a.
• B)10.75% p.a.
• C)11.00% p.a.
• D)Insufficient information to determine its price

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Definitions:

Hormone

A chemical substance produced by glands in the body that regulates and controls the activity of certain cells or organs.

Blood Platelets

Small cell fragments in the blood that are crucial for blood clotting and help in healing wounds.

Clotting

The process by which blood transforms from a liquid to a gel, forming a clot, which is critical in stopping bleeding.

Parasitic Infections

Conditions caused by parasites that invade the body, leading to various symtoms and health issues.