What Would You Estimate to Be the Required Rate of Return

question 8

Multiple Choice

What would you estimate to be the required rate of return for equity investors if a stock sells for $40.00 and will pay a $4.40 dividend that is expected to grow at a constant rate of 5%?

• A) 7.6%
• B) 12.0%
• C) 12.6%
• D) 16.0%

---

Definitions:

Social Media

Platforms and websites that enable users to create and share content or participate in social networking.

Mobile Devices

Portable electronic gadgets with computing capabilities, such as smartphones and tablets, used for communication, information, and entertainment.

Formal Channels

Official, recognized pathways for communication or information dissemination within an organization.

Informal Channels

Communication paths that are not officially sanctioned within an organization and often rely on personal relationships.