What Is the Required Return for a Stock That Has

question 18

Multiple Choice

What is the required return for a stock that has a constant-growth rate of 3.3%,a price of $25,an expected dividend of $2.10,and a P/E ratio of 14.4?

• A) 12.40%
• B) 10.92%
• C) 11.70%
• D) 11.26%

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Definitions:

Bony Features

Characteristics or structures formed by bone, such as projections, depressions, and openings, that serve as sites for muscle attachment or passages for nerves and blood vessels.

Sella Turcica

A saddle-shaped depression in the sphenoid bone at the base of the human skull that houses the pituitary gland.

Sphenoid Bone

A butterfly-shaped bone at the base of the skull that is connected to all other skull bones.

Hyoid

A U-shaped bone in the neck that supports the tongue and provides attachment for muscles associated with swallowing.