Suppose You Know a Company's Stock Currently Sells for $85

question 53

Multiple Choice

Suppose you know a company's stock currently sells for $85 per share and the required return on the stock is 10 percent.You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield.What is the current dividend if it's the company's policy to always maintain a constant growth rate in its dividends?

• A)$3.18
• B)$4.05
• C)$4.37
• D)$4.50
• E)$4.64

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Definitions:

1828 Election

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Aggressive Campaigning

Campaign strategies marked by vigorous and sometimes confrontational tactics, often used in politics to sway public opinion or undermine opponents.

Jackson's Victory

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is the official residence and workplace of the President of the United States, located in Washington, D.C.