Luther Industries Has a Dividend Yield of 4

question 118

Multiple Choice

Luther Industries has a dividend yield of 4.5% and and a cost of equity capital of 12%.Luther Industries' dividends are expected to grow at a constant rate indefinitely.The growth rate of Luther's dividends is closest to:

• A)7.5%
• B)5.5%
• C)16.5%
• D)12%
• E)4.5%

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Definitions:

Total Output

The total quantity of goods and services produced in an economy at a given time period.

Economies Of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the per unit cost as output increases.

Trade Sector

The segment of the economy that involves the exchange of goods and services across borders.

Exports Plus Imports

The total value of all goods and services a country sells to and buys from other countries; a measure of a country's international trade.