Suppose You Know That a Company's Stock Currently Sells for $75

question 101

Multiple Choice

Suppose you know that a company's stock currently sells for $75 per share and the required return on the stock is 14 percent.You also know that the total return on the stock is evenly divided between capital gains yield and a dividend yield.If it's the company's policy to always maintain a constant growth rate in its dividends,what is the current dividend per share?

• A)$4.24
• B)$4.91
• C)$5.34
• D)$5.76
• E)$6.07

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