Use the Dividend Growth Model to Determine the Required Rate

question 40

Multiple Choice

Use the dividend growth model to determine the required rate of return for equity.Your firm intends to pay a dividend of $2.25 per share one year from now,has a recent price of $40.20 per share,and anticipates a growth rate in dividends of 3.00% per year for the foreseeable future.

• A)8.76%
• B)8.60%
• C)8.44%
• D)There is not enough information to answer this question.

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