What Would You Estimate to Be the Required Rate of Return

question 21

Multiple Choice

What would you estimate to be the required rate of return for equity investors if a stock sells for $40 and will pay a $4.40 dividend that is expected to grow at a constant rate of 5%?

• A)7.6%
• B)12.0%
• C)12.6%
• D)16.0%

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