What Constant-Growth Rate in Dividends Is Expected for a Stock

question 104

Multiple Choice

What constant-growth rate in dividends is expected for a stock valued at $32.40 if next year's dividend is forecast at $2.20 and the appropriate discount rate is 13.6%?

• A) 7.02%
• B) 6.59%
• C) 6.81%
• D) 7.38%

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Definitions:

Federalists

Supporters of the ratification of the U.S. Constitution, who advocated for a strong national government.

Constitutional Amendment

A change or addition to the constitution, usually requiring a significant agreement process by legislatures and sometimes the public.

James Madison

Known as the "Father of the Constitution" for his pivotal role in drafting and promoting the United States Constitution and the Bill of Rights.

Bill of Rights

The first ten amendments to the U.S. Constitution, ratified in 1791, guaranteeing specific freedoms and rights to American citizens.