What Return on Equity Do Investors Seem to Expect for a Firm

question 29

Multiple Choice

What return on equity do investors seem to expect for a firm with a $55 share price,an expected dividend of $5.50,a beta of .9,and a constant growth rate of 5.5%?

• A) 9.00%
• B) 10.00%
• C) 13.95%
• D) 15.50%

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Definitions:

Self-Evident Meaning

Something that is clearly or obviously understood without the need for explanation or justification.

Comprehend Two Languages

The ability to understand and process information in two different languages.

Mutually Intelligible

pertains to languages or dialects that can be understood by speakers of each without prior study or special effort.

Communication System

An arrangement of technologies and processes for transmitting information from one point to another through verbal, written, or digital means.