ABC Inc Has a Dividend Yield Equal to 3 Percent and and Is

question 55

Multiple Choice

ABC Inc. has a dividend yield equal to 3 percent and is expected to grow at a 7 percent rate for the next seven years. What is ABC's required return?

• A) 10 percent
• B) 11 percent
• C) 4 percent
• D) 5 percent

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Definitions:

Autonomy

The state or condition of having independence or freedom, or the right to self-govern.

Affiliation

The connection or association between individuals or organizations, often formed for mutual benefit or to achieve a common goal.

Self-determination Theory

A theory of motivation that emphasizes the role of intrinsic motivation in driving human behavior and the importance of psychological needs for competence, autonomy, and relatedness.

Competence

The ability to do something successfully or efficiently, typically gained through experience or training.