An issue of common stock is selling for $57.30. The year-end dividend is expected to be $2.32 assuming a constant growth rate of 6%. What is the required rate of return? A) 10.3% B) 10.1% C) 4.1% D) None of the above

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 16MC
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What is the required rate of return? On this accounting question

An issue of common stock is selling for $57.30.
The year-end dividend is expected to be $2.32
assuming a constant growth rate of 6%. What
is the required rate of return?
A) 10.3%
B) 10.1%
C) 4.1%
D) None of the above
Transcribed Image Text:An issue of common stock is selling for $57.30. The year-end dividend is expected to be $2.32 assuming a constant growth rate of 6%. What is the required rate of return? A) 10.3% B) 10.1% C) 4.1% D) None of the above
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