What Constant Growth Rate in Dividends Is Expected for a Stock

question 96

Multiple Choice

What constant growth rate in dividends is expected for a stock valued at $32.00 if next year's dividend is forecast at $2.00 and the appropriate discount rate is 13 percent?

• A)5.00 percent
• B)6.25 percent
• C)6.75 percent
• D)15.38 percent

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Definitions:

Risk Difference

The difference in the probability of an event occurring between two comparison groups in epidemiological studies.

Incidence

The number of new cases of a disease occurring in a specific population over a certain period of time.

Odds Of Exposure

The likelihood that individuals will come into contact with a specific risk factor or condition.

Case-Control Study

A study that compares individuals with a particular condition (cases) to those without (controls) to identify factors that may contribute to the condition.