ABC Corp. just paid a dividend of $1.55 per share and plans to maintain a constant 3.2% dividend growth rate indefinitely. Today's stock price is $28.17. What is the dividend yield and the required return on this stock? A) Dividend yield is 5.68%; required return is 8.88%. B) Dividend yield is 5.50%; required return is 8.70%. C) Dividend yield is 3.20%; required return is 6.40%. D) Dividend yield is 3.20%; required return is 8.88%.

ABC Corp. just paid a dividend of $1.55 per share and plans to maintain a constant 3.2% dividend growth rate indefinitely. Today's stock price is $28.17. What is the dividend yield and the required return on this stock? A) Dividend yield is 5.68%; required return is 8.88%. B) Dividend yield is 5.50%; required return is 8.70%. C) Dividend yield is 3.20%; required return is 6.40%. D) Dividend yield is 3.20%; required return is 8.88%.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 3MC: Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming...

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