Zero-Sum Enterprise Expects to Pay an Annual Dividend of $0

question 95

Multiple Choice

Zero-Sum Enterprise expects to pay an annual dividend of $0.48 next year. Dividends and earnings have been growing at a compound annual rate of 8 percent and are expected to continue growing at that rate. What is an investor's required rate of return on Zero-Sum if the current price is $12?

• A) 12.3%
• B) 12.0%
• C) 10.0%
• D) 10.3%

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