What Is the Expected Constant-Growth Rate of Dividends for a Stock

question 7

Multiple Choice

What is the expected constant-growth rate of dividends for a stock with a current price of $87,an expected dividend payment of $5.40 per share,and a required return of 16%?

• A) 8.48%
• B) 6.25%
• C) 9.79%
• D) 5.23%

Identify characteristics of effective business messages.

Comprehend the role of professionalism and etiquette in business communication.

Grasp the audience-centered approach in business communication.

Acknowledge the ethical considerations in business communication.

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Definitions:

Dividends

Money disbursed by a business to its members, principally originating from the enterprise's earnings.

Financial Intermediary

An institution that pools investors’ money and invests it on their behalf giving the investors shares of itself. Mutual funds are the primary example.

Indirect Method

A way of calculating cash flows from operations by starting with net income and adjusting for changes in non-cash accounts.

Investment Banks

Financial institutions that assist individuals, corporations, and governments in raising capital, advising on mergers and acquisitions, and providing other financial services.