Richtex Brick Has a Current Dividend of $1

question 109

Multiple Choice

Richtex Brick has a current dividend of $1.70 and the market value of its common stock is $28.The expected market return is 13 percent and the risk-free rate is 9 percent.If Richtex stock is half as volatile as the market, and the market is in equilibrium, what rate of growth is expected for Richtex's dividends assuming a constant growth valuation model is appropriate for Richtex?

• A)4.93%
• B)4.65%
• C)5.37%
• D)5.41%

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