ABC Corporation's Common Stock Dividend Yield Is 2

question 347

Multiple Choice

ABC Corporation's common stock dividend yield is 2.1%, it just paid a dividend of $1, and is expected to pay a dividend of $1.07 one year from now. Dividends are expected to grow at a constant rate indefinitely. What is the required rate of return on ABC stock?

• A) 9.0%
• B) 9.1%
• C) 9.3%
• D) 10.6%
• E) 11.2%