Use the Dividend Growth Model to Determine the Required Rate

question 23

Multiple Choice

Use the dividend growth model to determine the required rate of return for equity.Your firm recently paid a dividend of $2.25 per share,has a recent price of $40.20 per share,and anticipates a growth rate in dividends of 3.00% per year for the foreseeable future.

• A)8.76%
• B)8.60%
• C)8.44%
• D)There is not enough information to answer this question.

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