What Is the Expected, Constant Growth Rate of Dividends for a Stock

question 94

Multiple Choice

What is the expected, constant growth rate of dividends for a stock with a current price of $100, expected dividend payment of $10 per share, and a required return of 16 percent?

• A)6.00 percent
• B)6.25 percent
• C)8.00 percent
• D)10.00 percent

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Definitions:

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A legal principle requiring certain contracts to be in writing and signed to be enforceable, including those for the sale of land or goods above a certain value.

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and used by parties in commercial transactions.

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