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

question 92

Multiple Choice

What is the expected constant growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and has a required return of 18 percent?

• A)3.41 percent
• B)5.50 percent
• C)9.26 percent
• D)12.5 percent $50 = $4(1 + g)/(.18 - g)