A Stock That Pays a Constant Dividend of $2

question 59

Multiple Choice

A stock that pays a constant dividend of $2.50 forever currently sells for $21. What is the required rate of return?

• A) 10%
• B) 11%
• C) 12%
• D) 12.5%
• E) 13%

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Definitions:

Cost Accounting Systems

The framework and processes used to systematically record, measure, and analyze costs associated with a company's operations, for the purpose of internal decision making.