Candy Apple Cakes' Stock Has a Current Market Value of $40.50.The

question 19

Multiple Choice

Candy Apple Cakes' stock has a current market value of $40.50.The company just paid a dividend equal to $1.50 per share,which is expected to grow at a constant rate forever into the future.If Candy Apple's marginal investors require a rate of return equal to 12 percent,what is the rate at which dividends are expected to grow in the future?

• A) 8.3%
• B) 12.0%
• C) 4.0%
• D) 8.0%
• E) There is not enough information to answer this question.

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