Franklin Corporation Is Expected to Pay a Dividend of $1

question 64

Multiple Choice

Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D₁ = $1.25) .The stock sells for $32.50 per share, and its required rate of return is 10.5%.The dividend is expected to grow at some constant rate, g, forever.What is the equilibrium expected growth rate?

• A) 6.01%
• B) 6.17%
• C) 6.33%
• D) 6.49%
• E) 6.65%

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