Luther Industries Has a Dividend Yield of 4

question 53

Multiple Choice

Luther Industries has a dividend yield of 4.5% and a cost of equity capital of 12%. Luther Industries' dividends are expected to grow at a constant rate indefinitely. The growth rate of Luther's dividends are closest to:

• A) 12%
• B) 16.5%
• C) 7.5%
• D) 5.5%